Bloomberg: BOJ may postpone rate hikes

According to Bloomberg survey, a pause in the Bank of Japan’s (BOJ) rate hike cycle is possible. The reason for the revision of expectations was protectionist measures introduced by US President Donald Trump, which significantly dampened the economic outlook.

About 90% of respondents said that American tariff measures will push back the timing of the Bank of Japan's rate hike. As expected, the final borrowing costs may also be lower due to the introduction of new tariff measures by United States President Donald Trump. 

Almost 70% of respondents noted the risk of recession for the country's economy. The report of Ryutaro Kono, chief economist at BNP Paribas, stated the high probability of a slowdown in the country's economy may force the regulator to take a pause in the cycle of raising borrowing costs this year.

At the same time, former analyst of the Japanese regulator Mari Iwashita notes that the process of normalization of monetary policy will continue, albeit at a more cautious pace.

In the current situation, analysts expect the central bank to lower its GDP growth forecast for fiscal 2025 from 1.1% to 0.7%. Other key indicators, according to the survey, will remain virtually unchanged from the estimates of three months ago.