Japan's consumer mood worsens, casting doubt on rate hike timing

Consumer Sentiment Decline: Japan's consumer sentiment fell to 36.2 in December, raising concerns about household spending and the potential for an interest rate increase by the Bank of Japan at its upcoming meeting.

Economic Vulnerability: The negative output gap indicates that Japan's actual economic output is below its full capacity, compounded by rising living costs and uncertainty regarding U.S. policies, although some companies are planning significant wage increases.