BOJ's Ueda warns of uncertainty over US tariffs

"Uncertainties originating overseas have been growing rapidly," Ueda said in a press conference after the central bank held its short-term interest rate target steady at 0.5 % at a policy meeting.

The BOJ will determine whether and when to raise rates "by evaluating accurately" economic and price trends both at home and abroad, he said.

Ueda said the BOJ will review its economic and price outlook after more details of Trump's tariffs become available going into early April.

The BOJ will closely watch how much US consumer sentiment will get worse, he said.

He was optimistic that Japan would achieve a virtuous cycle of rising wages and prices, saying that a wage increase pledged by Japanese companies in "shunto" spring labor talks so far was relatively strong.

Ueda said the BOJ will "adjust the degree of its monetary easing if the economy and prices move as expected."

The central bank will quicken the pace of adjustment if higher prices for rice and other items accelerate inflation, he said.

He said the BOJ will conduct open market operations flexibly if interest rates rise sharply and quickly but that this is not such a situation.

The BOJ said in a statement, "There remain high uncertainties surrounding Japan's economic activity and prices, including the evolving situation regarding trade and other policies in each jurisdiction."

Inflation in Japan is likely to be at a level that is generally consistent with the BOJ's 2 % target toward the end of fiscal 2026, the central bank said.

[Copyright The Jiji Press, Ltd.]

Photo by Reuters