16 May | Other

Bank of Japan official calls for postponement of interest rate hikes due to US tariffs

Bank of Japan official calls for postponement of interest rate hikes due to US tariffs

According to today's statements by Bank of Japan board member Toyoaki Nakamura, the country needs to postpone raising interest rates. He warned of the growing downward pressure on the economy due to US duties and emphasized the need for a cautious monetary policy of the state amid the current trade news. 

As part of the published data for the first quarter of  2025, the Bank of Japan noted the contraction of the economy, which exceeded forecasts. As noted by the Japanese official, the current situation in the global market may provoke a “vicious circle” of decreasing demand and prices. Such changes confirm the vulnerability of the country's economy to new duties from the US.

Despite sustained investment, uncertainty over the United State’s tariff policy is already causing Japanese companies to postpone spending or take a wait-and-see attitude.

Earlier, the US President Donald Trump raised import tariffs for many major trading partners, including Japan. As early as July, the country could face duties of 24% if its government fails to reach agreements with Washington.

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