'Stuck between a rock and a hard place', BOJ leaning towards June rate hike: Amundi
CNBC
Last updated: April 28, 2026
The Bank of Japan (BOJ) is facing a dilemma, likely leaning towards a policy rate hike in June due to increasing inflationary pressures and wage growth. However, persistent uncertainties regarding future inflation and wage trends are making the decision complex.
- The BOJ is currently navigating a gradual path toward policy normalization. Recent data indicates a strengthening economy, with significant wage increases contributing to this trend. This upward pressure on wages is a key factor influencing the BOJ's consideration of a rate hike.
- Economists like Aidan Yao from Amundi Investment Institute suggest that the BOJ might be "stuck between a rock and a hard place," highlighting the delicate balance they must strike. While inflation is rising, the sustainability of this trend and the certainty of continued wage growth remain subjects of debate.
- A June rate hike appears increasingly probable, but the central bank will likely proceed cautiously. The decision hinges on the BOJ's assessment of incoming economic data, particularly concerning inflation and labor market dynamics. Any move would signal a significant shift in Japan's long-standing ultra-loose monetary policy.
