Overview

• Naoki Tamura said the BOJ stands ready to deliver “decisive” rate hikes if upside risks to prices grow.
• Underlying consumer inflation has been rising toward the BOJ’s 2% target and is unlikely to reverse as companies continue to raise wages and prices.
• The central bank ended a decade-long stimulus program in 2024 and lifted short-term interest rates to 0.5% in January on the view that price stability was within reach.
• President Trump’s April reciprocal tariffs have pressured Japan’s economy and prompted the BOJ to cut its growth forecasts.
• Medium- to long-term inflation expectations among firms and households have climbed to around 2%, reinforcing entrenched price pressures.