Japan Inflation Outlook Jumps, Backing BOJ Case for Rate Hike
- Breakeven rate in Japan rises to highest since at least 2004
- Inflation outlook makes it easier to justify hike: economist
This article is for subscribers only.
Inflation expectations in Japan have risen to the highest since at least 2004 by one measure as the tumbling yen pressures import prices higher, adding to the case for the central bank to raise interest rates.
Japan’s 10-year breakeven rate, the yield difference between nominal government bonds and same-maturity inflation-linked securities, rose to 1.598% on Thursday, Bloomberg-compiled data show. That was the biggest gap on record in data going back to 2004, when inflation-linked notes were first issued, suggesting that investors are expecting the cost of living to climb.