Consumer goods CPI may still face constraints, the Bank of Japan may delay interest rate hikes until March, and the Federal Reserve will slow down the pace of interest rate cuts --- 0109 Macro Dehydration

In December, the PPI remained negative month-on-month, with the decline in prices of bulk commodities such as coal and steel, along with low capacity utilization rates in the midstream and downstream sectors, still constraining the recovery of the PPI, which in turn suppresses the commodity CPI. Although the old-for-new policy in December improved consumption volume, the CPI is calculated based on prices after subsidies, and the aforementioned policy may actually suppress the CPI readings. Consumer goods CPI may still face constraints.

In November, Japan's nominal wages maintained a 3% growth, while real wages moderately declined due to inflation. Despite the continued depreciation of the yen, there are few complaints in the political arena regarding the low policy interest rates. Currently, an interest rate hike is expected in January, but there are increasing risks, leaning towards a delay until March.

The minutes overall show that concerns about the upside risks of inflation have led the Federal Reserve to slow down the pace of interest rate cuts. Although the meetings in December and November are only one month apart, there has been a significant change in the policy stance of Federal Reserve officials. Since the September FOMC meeting, newly released employment data in the U.S. has generally been strong, and the non-farm payroll data for December, which is expected to be released on Friday evening, is also anticipated to remain resilient