The Bank of Japan’s October 30 decision to hold its policy rate at 1.25% while declaring underlying inflation “generally consistent” with the 2% target, coupled with an upward revision to its fiscal 2027 core CPI forecast to 2.6%, has anchored trader expectations for a 25-basis-point hike in December. Recent data showing September core CPI at 2.1% and Tokyo leading indicators exceeding target, alongside persistent demand pressures from AI investment and energy prices, reinforced the shift toward quarterly normalization after the June and September increases. Market-implied odds of 78.5% for a December move to 1.5% reflect this hawkish guidance from Governor Ueda, who emphasized proactive adjustment to prevent overshooting, while the 15% probability of no change accounts for the board’s preference to monitor lending conditions and growth before accelerating the pace.