Bank of Japan Minutes Drop a Bombshell on Inflation ๐ฅ
Just released: Minutes from the BOJ's October meeting show board members are getting seriously concerned about rising prices.
Key highlights:
One member noted that household and business inflation expectations have already hit around 2% โ the BOJ's target.
Strong warnings about upside risks: "Must stay vigilant against renewed price increases."
Big worry โ ongoing yen weakness could push import costs higher, risking an inflation "overshoot."
Debate inside: Some see inflation firmly taking hold, others want more evidence that core rates stabilize at 2%.
A key line: Progress toward the target could accelerate by spring 2026... but strong wage gains in next year's "shunto" negotiations will be crucial.
What this means for markets:
Stronger expectations for policy normalization could support the yen after years of depreciation.
If Japan tightens (ending ultra-low rates), it may reduce global "cheap money" flows โ the yen carry trade unwind could add volatility.
Crypto & risk assets: Liquidity shifts have historically created headwinds during past tightening cycles.
The BOJ just hiked rates to 0.75% this month, and these minutes reinforce they're ready for more if data holds up.
Macro picture is shifting โ Japan might not stay the "free liquidity" source forever.
Are you watching the yen closely, or bracing for more crypto volatility?
Thoughts below! ๐