I don't think anyone would want to the be in the BOJ's shoes right now. On the one hand, inflation pressures are giving policymakers every reason to keep raising interest rates. But on the other hand, Japan's economy is already dealing with expensive energy imports and a weak yen - not to mention a very uncertain global outlook.If that isn't problematic enough, then here's the kicker. The inflation pressures that are building aren't exactly the kind that the BOJ has been hoping for.The central bank has spent decades in trying to nurture a healthier cycle of rising wages, stronger consumer spending, and sustainable price increases. For the most part, those efforts went nowhere. And it took a global economic reset from the Covid pandemic to finally give Japan a get-out-of-jail-free card.Remember, Japan spent much of the last thirty years struggling with stagnant wages and prices. Businesses were reluctant to raise prices, workers weren't getting any meaningful wage increases, and consumers had grown accustomed to things staying relatively cheap.Then came the Covid pandemic, followed by global supply chain disruptions and a surge in commodity prices. Suddenly, businesses had little choice but to raise prices as inflation started making its way back into the Japanese economy. Initially, that was largely cost-push inflation too. But it also helped break Japan's long-standing reluctance to raise prices, while workers began pushing harder for higher wages to keep up with living costs.And for a while, it looked like Japan was finally getting the sort of inflation that policymakers had spent years trying to achieve. But amid the US-Iran conflict this year, much of the latest surge in price pressures is coming from the other direction.Higher oil prices and import costs are forcing businesses to pay more, with those increases eventually being passed on to consumers. Once again, it's another story of cost-push inflation. And unlike wage-driven inflation, it doesn't necessarily leave households with more money to spend. In fact, it is quite the opposite actually.And Japan's latest trade figures underline the problem. The country recorded a ¥2.8 trillion trade deficit for the April to September period, more than double the roughly ¥1.2 trillion deficit recorded a year earlier. That is largely driven by a 20.4% surge in imports as soaring energy import costs take their toll.This is where things get particularly awkward for the BOJ. The central bank has spent years trying to get inflation going but now it has to worry about whether the latest bout of price pressures might actually undermine the wage-driven recovery it has worked so hard to achieve.So, where does that leave interest rates?For now, markets are virtually ruling out a rate hike in October but are pricing in roughly a 74% probability of another move in December. That fits with the sort of messaging we have seen from the BOJ as of late, with the tightening pace still sticking around once every quarter in order to manage the risks of inflation overshooting.Having said that, raising interest rates isn't going to make oil prices any cheaper. And while a stronger yen could provide some relief, that's hardly a given when Treasury yields remain elevated and the dollar continues to attract demand from traders across the globe.All the while, higher borrowing costs could end up squeezing domestic spending and business investment at a time when Japan can ill afford another drag on growth.Damned if you do, damned if you don't.It's kind of ironic. The BOJ spent decades trying to escape an economy where prices wouldn't rise. But now, it risks tightening policy because prices appear to be rising for all the wrong reasons.I'm not saying that another rate hike would necessarily be a mistake. However, I would argue that the margin for error is getting smaller. And for a central bank that has spent so long trying to get inflation right, the last thing it needs is to get the timing wrong. This article was written by Justin Low at investinglive.com.