Japan's inflation surge signals economic trajectory. Consumer prices, excluding fresh food, rose to 2.9% in October, aligning with market projections. This intensifies the Bank of Japan's reliance on forthcoming data for its December policy decisions. If the BoJ needs to fight rising prices and adopt a higher interest rate regime this will put a lot of pressure on the ECB to defend yield spreads and avoid drastic capital moves out of the Eurozone.

This comes in a moment where the bloc entered recessionary territory...