Overview

• Junko Nakagawa warned that high uncertainty over U.S. tariff policy could weigh on business and household sentiment worldwide and drag on Japan and overseas economies.
• The Bank of Japan will continue to assess incoming data and make appropriate decisions, with policy conditional on how the outlook for activity and prices evolves.
• She noted a possible strengthening of wage gains and their pass‑through to prices, but cautioned that tariff-driven cost cutting could weaken the wage–price feedback.
• The BOJ kept rates unchanged in July after lifting its inflation projections, and market pricing still reflects the possibility of another hike this year.
• Economists in a Reuters poll mostly expect at least a 25‑basis‑point increase in 2025, with the Tankan survey seen as a key near‑term input on corporate sentiment.