Japan's PPI Inflation Stable In November, Ueda Says Inflation Nearing BoJ's Target

Akira Ito
10 Dec, 2025
Tokyo

Japan's bond yields hovered at 18-year highs amid rising expectations that the Bank of Japan is more likely to raise rates next week.

The Nikkei 225 Stock Average decreased 0.5%, and the broader Topix declined 0.1% as the yen remained under pressure and traded at 156.65 against the U.S. dollar. 

Bank of Japan Governor Kazuo Ueda, in his prepared remarks, suggested that inflation is approaching the central bank's target rate, supporting the case for a rate hike.

The yield on the 10-year Japanese government bond held at 1.96%, an 18-year high, as the bond market adjusts to higher rates in 2026.

Japan's workers' unions are likely to demand a wage increase of more than 4% at the end of spring negotiations, a third annual increase in a row. 

However, small and medium enterprises are likely to raise wages at a slower pace amid high inflation, subdued domestic demand growth, and an uncertain outlook for exports. 

Japan's producer price index rose 2.7% in November, matching the annual rate in the previous month, according to the Bank of Japan. 

In a broad-based price increase, prices for food and beverages rose 4.9%, transportation equipment advanced 1.6%, and general-purpose machinery inched higher 2.7%. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.5% to 50,426.24, and the broader Topix declined 0.1% to 3,383.19. 

Technology stocks remained under pressure, reflecting market weakness in overnight trading in New York ahead of the Federal Reserve's rate decisions later in the day. 

Tokyo Electron decreased 1.4% to ¥33,120.0, Advantest Corp. declined 0.5% to ¥20,150.0, and Lasertec Corp. dropped 4.2% to ¥31,520.0. 

IHI Corp. fell 1.4% to ¥3,002.0, Kawasaki Heavy Industries rose 2.5% to ¥11,720.0, and Mitsubishi Heavy Industries eased 0.5% to ¥4,245.0.