BOJ Governor warns Trump's tariffs will hurt the country's economy

Bank of Japan (BOJ) Governor Kazuo Ueda told lawmakers that the 24% US tariffs on the Asian country's goods are likely to exert downward pressure on Japan's GDP by weakening trade activity and affecting business sentiment. Uncertainty about the economic outlook has increased, Ueda noted.

According to Reuters analysts, the impact of the potential trade restrictions on Japan's inflation is still uncertain. On the one hand, US duties could lower import prices, thereby slowing consumer price growth. On the other hand, they could raise prices by disrupting global supply chains. The financial regulator will closely monitor the effects and take them into account when making monetary policy decisions, Ueda pledged.

BOJ Deputy Governor Shinichi Uchida added that the central bank will continue to hike interest rates if core inflation remains on track toward the 2% target. The BOJ will hold its next monetary policy meeting on April 30–May 1, when updated forecasts for economic growth and inflation will be published.