This comes from page B7 in the December 9 print edition of the South China Morning Post:
Central banks in South Korea and New Zealand raised interest rates to curb inflation, while the Bank of Japan said it was close to ending its deflation-fighting policy.
The Bank of Korea unexpectedly raised the overnight call rate by 25 basis points to 3.75 percent yesterday. The Reserve Bank of New Zealand raised its cash rate by the same amount to a record 7.25 percent.
In Tokyo, Bank of Japan governor Toshihiko Fukui said "an end is close" to his policy of flooding commercial banks with cash.
The focus of Asian central banks on stemming inflation follows a five-day jump in oil prices and reports on US economic growth that reinforced expectations that the Federal Reserve would keep raising rates. The European Central Bank and Bank of Indonesia also increased borrowing costs this month.
That explanation seems a bit curious in light of this report, from Bloomberg:
U.S. Treasuries rose, cutting the cost to the government on $8 billion of 10-year notes sold today, amid optimism that the Federal Reserve may stop raising interest rates early next year.
Treasuries held their gains even after a gauge of demand for the 10-year notes slipped to a seven-month low and foreign demand was the weakest since June. Bill Gross, manager of the world's biggest bond fund, said on the CNBC television network that the Fed, expected to raise rates at its next meeting on Dec. 13, will alter its post-meeting statement to signal an increase in January will be the last.
"People believe the Fed statement is going to be dovish next Tuesday and as a result are trying to position for that,'' said Lundy Wright, head of U.S. government bond trading at Nomura Securities International Inc. in New York, one of the 22 primary U.S. government securities dealers obligated to bid in Treasury auctions.
Uh, one point of order. I don't think it's quite right to characterize as "dovish" any talk of a halt in funds rate increases that have already accumulated to 300 basis points and squeezed the yield curve down to about 50 basis points.
That aside, I think it is probable that the world's central banks are primarily responding to their own views about developments on the inflation front. If the follow-the-Fed explanation is at least partly correct, however, someone's version of what the future will bring is going to be wrong.