Softer Japan wage data unlikely to derail BOJ hikes, even as yen risk grows
USD/JPY — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 163.00 |
Citi | Bearish | 163.00 |
MUFG | Bullish | 146.00 |
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Capital Economics' view that the BOJ will look through May's softer wage print keeps its 2% end-2027 rate forecast intact, suggesting markets should not read too much into a single month's slowdown in cash earnings growth. OCBC's warning adds a separate but related risk: persiste
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Japan wage growth streak hits three months, putting June BOJ move in focus
Lead — The desk sees the recent uptick in Japan's real wages as a pivotal signal for the Bank of Japan's (BOJ) upcoming policy decision, particularly the June 15-16 meeting. Per the full note [source], real wages rose 1.0% year-on-year in March, marking the third consecutive month of growth, which aligns with the BOJ's criteria for potential rate normalization. With nearly two-thirds of economists anticipating a rate hike to 1.0% by the end of June, the data presents a compelling case for a shift in monetary policy. However, the moderation from February's 2.0% growth offers the BOJ room for a cautious approach.