Particle.news
Download on the App Store
5 ARTICLES
·
last wk.

BOJ Signals Caution on Rate Hikes as Trade Policy Uncertainty Intensifies

He said the bank will raise borrowing costs once inflation data meet its projections.

The Japanese government's nominee for the Bank of Japan (BOJ) Deputy Governor Shinichi Uchida speaks during a hearing session at the lower house of the parliament in Tokyo, Japan, February 24, 2023. REUTERS/Issei Kato/ File Photo
The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan March 18, 2024. REUTERS/Kim Kyung-Hoon/File Photo
Image

Overview

  • Deputy Governor Shinichi Uchida warned that extreme uncertainty over US tariffs skews risks to the downside for Japan’s economic activity and prices.
  • The remarks followed President Trump’s announcement of a trade deal requiring $550 billion in Japanese investment and a 15% tariff on imports from Japan.
  • A Reuters poll found 83% of economists expect no change to the BOJ’s 0.5% rate at its July and September meetings, while 54% foresee at least a 25 basis-point increase by year-end.
  • Uchida noted that widespread food-cost rises signal a lasting shift in firms’ price-setting behaviour and have pushed core inflation toward the 2% target.
  • Economists predict core consumer inflation will peak at 2.6% in the year ending March 2026 before decelerating to 1.7% in the following fiscal year.