Bank of Japan: Wage data backs rates hike path – Wells Fargo

Source Fxstreet

Wells Fargo Economics expects Japan’s May labor cash earnings to confirm a sustained wage-price cycle, supporting Bank of Japan (BoJ) policy normalization. The report highlights strong Shuntō wage settlements and resilient Gross Domestic Product (GDP), and projects that the BoJ will raise rates by 25 bps in Q3, likely September, taking the policy rate to 1.25% by year-end.

Wages support BoJ tightening outlook

"With Japan’s labor cash earnings for May due next week, the release will offer a fresh read on whether the wage-price cycle remains intact. The Bank of Japan (BoJ) continues to signal conviction in its path toward policy normalization, as April labor cash earnings and ordinary time earnings (the BoJ's preferred gauge of underlying wage momentum) rose 3.6% and 3.3% year over year, respectively."

"This year's Shuntō negotiations delivered another round of strong pay gains, with labor unions securing average wage increases of more than 5% for a third consecutive year, effective from April. Given the limited coverage of union workers and the lagged pass-through from negotiated settlements to realized earnings, wage growth should remain supported in the months ahead."

"While inflation has been soft, the fading of government subsidies and impact of a weaker yen on import prices should contribute to a gradual pickup in inflation. Combined with resilient GDP growth and a solid Q2 Tankan report, a strong wage print would support the case for further tightening. As such, we continue to expect the BoJ to deliver a 25 bps rate hike in Q3 (most likely September), bringing the policy rate to a terminal level of 1.25% by year-end."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Tesla delivers 480,000 vehicles in Q2 but BYD keeps the global EV crownTesla (NASDAQ: TSLA) surpassed Wall Street’s sales expectations and shipped 480,126 vehicles in the second quarter of 2026.  The EV company shipped 74,000 more units than expected but still failed to outsell BYD. That relative underperformance could be part of the reason the EV maker’s stock has failed to follow the positive news it delivered...
Author  Cryptopolitan
14 hours ago
Tesla (NASDAQ: TSLA) surpassed Wall Street’s sales expectations and shipped 480,126 vehicles in the second quarter of 2026.  The EV company shipped 74,000 more units than expected but still failed to outsell BYD. That relative underperformance could be part of the reason the EV maker’s stock has failed to follow the positive news it delivered...
placeholder
JPMorgan says Strategy’s Bitcoin sales policy will introduce two-way risks in the crypto marketJPMorgan Chase & Co. is concerned that Strategy’s new policy of selectively selling its Bitcoin holdings will introduce new risk to the crypto market.  On Monday, Strategy announced a BTC monetization program through which the company can sell a portion of its 847,363 BTC holdings to support its preferred dividend payments and buybacks. The so-called...
Author  Cryptopolitan
14 hours ago
JPMorgan Chase & Co. is concerned that Strategy’s new policy of selectively selling its Bitcoin holdings will introduce new risk to the crypto market.  On Monday, Strategy announced a BTC monetization program through which the company can sell a portion of its 847,363 BTC holdings to support its preferred dividend payments and buybacks. The so-called...
placeholder
Bitwise, Tiger Research both say Bitcoin's bear market is approaching its final stageTiger Research and Bitwise CIO are now calling the bear market bottom after Bitcoin’s price rebound into July. Bitcoin briefly climbed to a daily high of $62,200 on Binance Thursday afternoon. It now hovers around $61,400, putting a 2.49% gain in the day and 3.08% gain over the last seven days.  Tiger Research analysts issued...
Author  Cryptopolitan
14 hours ago
Tiger Research and Bitwise CIO are now calling the bear market bottom after Bitcoin’s price rebound into July. Bitcoin briefly climbed to a daily high of $62,200 on Binance Thursday afternoon. It now hovers around $61,400, putting a 2.49% gain in the day and 3.08% gain over the last seven days.  Tiger Research analysts issued...
placeholder
HOOD Climbs 8% on Robinhood Chain Launch and an AI Guinness RecordRobinhood launched the public mainnet of Robinhood Chain, moving its Arbitrum-based Layer-2 network live during a keynote in London. HOOD shares gained more than 8% after the event.The company also se
Author  Beincrypto
14 hours ago
Robinhood launched the public mainnet of Robinhood Chain, moving its Arbitrum-based Layer-2 network live during a keynote in London. HOOD shares gained more than 8% after the event.The company also se
placeholder
Oil Extends Fall After Saudi Exports Surge: Why Are Bitcoin and Gold Rallying?The oil price fall deepened on Thursday as WTI crude slipped below $68 for the first time in 125 days. Meanwhile, Bitcoin (BTC) climbed more than 5% to levels above $61,500, and gold extended gains be
Author  Beincrypto
14 hours ago
The oil price fall deepened on Thursday as WTI crude slipped below $68 for the first time in 125 days. Meanwhile, Bitcoin (BTC) climbed more than 5% to levels above $61,500, and gold extended gains be
Related Instrument
goTop
quote