Japan Interest Rate

U.S. trade policy poses a major risk to Japan’s economic outlook, Bank of Japan (BoJ) board member Junko Nakagawa said in a speech. She also warned that higher U.S. tariffs could directly hurt Japanese corporate activity, affecting exports, production, capital spending, sales, and profits. Indirect effects may also emerge through weaker business and consumer sentiment, or volatility in commodity prices and financial markets. Her comments align with BoJ Governor Kazuo Ueda, who voiced similar concerns during a parliamentary hearing. Growing economic uncertainty may prompt the BoJ to pause or slow its pace of interest rate hikes. Still, Nakagawa reaffirmed the central bank’s commitment to raise rates if the economy and inflation evolve as expected. Meanwhile, Japan’s economy minister Ryosei Akazawa is in Washington for trade talks, as U.S. President Donald Trump claimed “big progress” following his unexpected intervention in the negotiations.