Overview

• Bank of Japan Governor Kazuo Ueda said further rate increases will proceed only if growth and price trends meet the bank’s forecasts, with decisions made without preconceptions.
• Ueda cautioned that a 15% U.S. tariff could depress Japan’s economy, corporate profits and wage-setting, and said prolonged uncertainty may weaken firms’ willingness to raise pay.
• The yen eased to roughly 147.5–147.7 per dollar after his remarks, as traders marked down the probability of an October move and some analysts suggested December is more likely.
• The September Tankan showed large manufacturers’ sentiment at 14 for a second straight quarterly gain, with 9 of 16 manufacturing sectors improving, even as consumer-facing services softened and real wages stayed weak.
• Policy deliberations now factor in limited visibility on U.S. data due to a government shutdown and the weekend LDP leadership election that could influence fiscal and market expectations.