Nov 14 (Reuters) - Recent U.S. dollar strength and higher U.S. interest rates combined with indications of sticky Japanese inflation and stronger economic data from October seem to practically ensure another Bank of Japan rate hike in December despite views suggesting otherwise .
The Trump trade has returned with a vengeance following the red sweep in the Nov 5 U.S. elections. Higher Treasury yields tied to higher U.S. deficits and likely higher inflation on expected Trump policies sent USD/JPY from a 151.30 low on Nov 6 to 155.94 EBS Thursday.
The domestic inflation implications of renewed yen weakness have recently been highlighted in BOJ Policy Board deliberations, and will undoubtedly be a major factor in a likely decision to hike at the Dec 18-19 meeting.
Although inflation may have slowed a bit into the fall with Tokyo core consumer prices back down near the BOJ's 2% target and overall Japanese CPI a bit lower in September, there are indications of renewed inflation pressures as evidenced in the corporate goods price index out Wednesday .
And other economic indicators may also suggest fresh growth from October following confirmation of a weak third quarter in GDP data due Friday (the poll forecast is for 0.7% annualised growth from 2.9% in Q2).
Shifting U.S. Federal Reserve expectations may also provide a fresh reason for the BOJ to hike in December. A Trump presidency and associated policies could well force the Fed to pause in cutting rates further ,
, . Recent comments from Fed officials suggest a possibly more circumspect view taking hold , .
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(Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)
((haruya.ida@thomsonreuters.com;))
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