BoJ to lower GDP outlook due to US trade policies — Reuters

The Bank of Japan (BoJ) is reportedly planning to revise its economic growth forecast for the 2025 fiscal year, according to Reuters sources. The move comes in response to mounting pressure from the US president’s trade policies. The decision is being made as market volatility persists, fueled by conflicting statements from the American leader.

Three well-informed Reuters sources have revealed that Japan's central bank is preparing to downgrade its previous optimistic 1.1% GDP growth forecast. While the exact extent of the revision hasn't been finalized, agency analysts stress that the outcome of the Japan-US trade negotiations will be the critical factor.

In a recent press interview, Bank of Japan Governor Kazuo Ueda emphasized the regulator's readiness to adjust monetary policy if threats to the national economy emerge. He reaffirmed plans for gradual interest rate hikes despite trade-related risks.

Still, most Bank of Japan policymakers believe that US tariff policies may slow, but not stop their progress toward the 2% inflation target that guides their monetary policy decisions.