The head of the Bank of Japan, Kazuo Ueda, has recently spoken out—Japan's economy is recovering moderately, but inflation needs to be observed further. He expects the inflation rate to briefly fall below the 2% line at the beginning of the fiscal year 2026, but it may rise again afterward.

It is worth noting that wages and prices are now starting to "move in step," and the transmission of exchange rate fluctuations to prices has become more direct. Ueda Kazuo has stated: If the economy and prices continue to follow expectations, the Central Bank will appropriately tighten its easing policy, and raising interest rates is not out of the question.

This signal is not a small matter for global liquidity—once the expectations for a rate hike in the yen heat up, arbitrage trading may loosen, and funds will find new outlets.