--- title: "Global markets in flux: Japan's inflation data fuels rate hike hopes amid holiday trading" description: "Asian shares dipped 0.3% as Japan's yen rallied ahead of a potential Bank of Japan rate hike following strong inflation data. Japan's Nikkei index fell 0.7%, with core consumer prices in Tokyo exceeding the central bank's 2% target. Wall Street futures rose 0.1% despite a quiet trading session due to the Thanksgiving holiday, while Treasury yields eased. Oil prices edged up but remain on track for weekly losses amid geopolitical tensions, while gold prices fell 2.7% this week." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "Newsdeck" author: "Reuters" author_url: "https://www.dailymaverick.co.za/author/reuters/" canonical_url: "https://www.dailymaverick.co.za/article/2024-11-29-global-markets-in-flux-japans-inflation-data-fuels-rate-hike-hopes-amid-holiday-trading/" published: "2024-11-29T04:33:26" updated: "2024-11-29T04:33:27" lang: "en-ZA" word_count: 505 --- # Global markets in flux: Japan's inflation data fuels rate hike hopes amid holiday trading > Global markets in flux: Japan's inflation data fuels rate hike hopes amid holiday trading By Reuters · Published 29 November 2024, 06:33 SAST · Updated 29 November 2024, 06:33 SAST ## Key points - As Asian shares dipped on Friday, the yen flexed its muscles in anticipation of a Bank of Japan rate hike, proving that even currencies can have a glow-up when inflation data gets spicy—while the rest of the world took a breather for Thanksgiving, leaving traders to twiddle their thumbs in a market that felt more like a post-holiday hangover than a bustling bazaar. - Asian shares dipped 0.3% as Japan's yen rallied ahead of a potential Bank of Japan rate hike following strong inflation data. - Japan's Nikkei index fell 0.7%, with core consumer prices in Tokyo exceeding the central bank's 2% target. - Wall Street futures rose 0.1% despite a quiet trading session due to the Thanksgiving holiday, while Treasury yields eased. - Oil prices edged up but remain on track for weekly losses amid geopolitical tensions, while gold prices fell 2.7% this week. ## Content Asian shares slipped on Friday while the yen was aiming for its best week in four months as strong local inflation data had traders favouring an imminent rate hike from the Bank of Japan. Overnight, trading in U.S. equities and Treasuries was closed due to the Thanksgiving holiday, leaving little lead for Asia. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3% and was down 0.5% for the week. Japan's Nikkei dropped 0.7% as the yen surged after Tokyo's inflation data. Data showed [core consumer prices](https://www.reutersconnect.com/all?search=all%3AL3N3MY0PB&linkedFromStory=true) in Japan's capital accelerated in November and stayed above the central bank's 2% target in a sign of broadening price pressure. The dollar fell 0.9% to 150.17 yen, bringing its weekly loss to 3%, the biggest since late July. Traders now see a 60% chance that the BOJ could hike interest rates again in December, having been undecided before the data. A strengthening economy and concerns over the depreciating yen have recently added to the urgency for the BOJ to act. "We note that the acceleration in inflation, combined with the solid recovery in monthly activity, increases the odds of another BoJ rate hike in December," said analysts at ING in a note. "With the US closed for Thanksgiving yesterday, and many market participants likely extending the holiday to the weekend, there isn't too much action in financial markets to talk about." Wall Street futures ESc1, NQc1 rose 0.1% in Asia, while Treasury yields eased as the cash market reopened in Japan. Ten-year yields fell 2 basis points (bps) to 4.240%, the lowest in a month, and were down 17 bps for the week, the biggest since early September. The dollar is down 1.4% against its major peers this week as markets rekindled hopes for a US rate cut in December. Futures narrowed the odds of a quarter-point rate cut from the Federal Reserve in December to 63%, from 55% a week ago, according to CME Group's Fed Watch Tool. Most of the action overnight was in Europe, where French bond yields edged lower, a welcome bit of respite for France's government, which saw its borrowing costs rise to [their highest over Germany's since 2012](https://www.reutersconnect.com/all?search=all%3AL2N3MZ0CD&linkedFromStory=true) on Wednesday. French Prime Minister [Michel Barnier](https://www.reutersconnect.com/all?search=all%3AL2N3MZ09F&linkedFromStory=true) on Thursday dropped plans to raise electricity taxes in his 2025 budget, bowing to far-right threats to bring the government down unless he eased the burden on the working classes. German inflation missed forecasts in November, suggesting some downside risk for the eurozone inflation reading due later in the day. Traders are still leaning towards a 25-bps rate cut from the European Central Bank in December, after a board member [Isabel Schnabel](https://www.reutersconnect.com/all?search=all%3AL2N3MY0BL&linkedFromStory=true) said it should only cut rates gradually. Oil prices were up slightly but looked set for weekly losses on the [Israel-Hezbollah ceasefire deal](https://www.reutersconnect.com/all?search=all%3AL2N3MX02D&linkedFromStory=true) in Lebanon. US West Texas Intermediate crude futures rose 0.1% to $68.76 a barrel, but were down 2.5% for the week. Gold is down 2.7% for the week at $2,638.29 per ounce. (Reporting by Stella Qiu; Editing by Kim Coghill)