The return of inflation and wage growth is giving the Bank of Japan room to raise interest rates and declare the end of a long period of stagnation.

Australia's export price index rose 3.6%, while its import price index advanced 0.2% in the fourth quarter of 2024.

Despite limited developments that would justify a policy shift since December, Japan's central bank nevertheless went ahead to raise interest rates.

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Outside of a U.S. President bending norms, the Fed also faces challenges in achieving its economic objectives. Inflation remains above its 2% target: Its preferred measure is at 2.4%, though core prices — considered a better gauge of where inflation is headed — rose 2.8% in November from a year ago.

Japan’s stance is at odds with the loosening trends adopted by the U.S. Federal Reserve and the European Central Bank, which have been cutting rates after raising them to clamp down on inflation.

S&P 500 E-Mini futures (ESH25) are up +0.46%, andMarch Nasdaq 100 E-Mini futures (NQH25) are up +0.73% this morning as solid earnings from Apple and Intel buoyed sentiment, while investors geared up for the release of the Federal Reserve’s first-line inflation gauge.

The first central bank meetings of 2025 suggest it will be a year in which policymakers go their own way as economic paths diverge, as the United States holds interest rates steady, the eurozone cuts,

Stock Market Updates: Benchmark equity indices opened on a positive note on Friday. The BSE Sensex started at 76,889, gaining 129.08 points or 0.17% from its previous close of 76,759.81. Similarly, the NSE Nifty50 opened 47.25 points or 0.20% higher at 23,296.75, compared to its prior close of 23,249.50.

Bank of Japan (BoJ) Governor Kazuo Ueda said on Friday that underlying inflation is still somewhat below 2%. Ueda added that the Japanese central bank would maintain an accommodative policy to support price trends. Recent inflation is driven mostly by cost-push factors.

Underlying inflation in Japan is still slightly below the central bank’s target of 2%, Bank of Japan Gov. Kazuo Ueda said, underlining that it is in no hurry to raise interest rates.

The Mexican peso and Canadian dollar were on guard ahead of a looming Feb. 1 deadline which U.S. President Donald Trump has said would be the date he imposes 25% tariffs on imports from the two countries.