On November 29, 2024, the Japanese yen surged to a six-week high of 150 per dollar, driven by unexpected inflation in Tokyo that heightened expectations for a Bank of Japan (BOJ) interest rate hike in December.

Tokyo's core consumer price index rose by 2.2% year-on-year in November, exceeding market forecasts and indicating potential inflationary pressures, although some analysts remain cautious about an imminent rate hike.

Analysts at ING noted that the recent acceleration in inflation, coupled with economic recovery, increases the likelihood of a BOJ rate hike.

If implemented, the anticipated December hike would mark the BOJ's third increase in 2024, following nearly a decade of negative interest rates as the bank adjusts its policy in response to rising wages and inflation.

BOJ Governor Kazuo Ueda emphasized the central bank's commitment to further increasing interest rates, citing a 'virtuous cycle' of higher wages and stable inflation.

Despite rising inflation, Mizuho Securities strategist Shoki Omori suggested the BOJ may maintain current policy settings due to concerns over declining consumer spending.

In other markets, gold prices fell 2.7% for the week, trading at $2,638.29 per ounce.

Asian shares fell on the same day, with MSCI's index of Asia-Pacific shares outside Japan decreasing by 0.3%.

The U.S. dollar experienced a 1.4% decline against major peers this week, as speculation for a U.S. rate cut in December grew, with futures indicating a 63% chance for a quarter-point cut.

This dollar weakness allowed the British pound to reach its highest level since November 20, 2024.

Wall Street futures rose by 0.1%, while Treasury yields eased, with ten-year yields falling to 4.240%, the lowest in a month.

Meanwhile, German inflation data for November fell short of expectations, raising concerns about eurozone inflation readings set to be released later.