Bank of Japan Deputy Governor Shinichi Uchida signaled caution on further rate hikes, citing “extremely high” uncertainty surrounding U.S. trade policy and its global economic impact. His remarks followed U.S. President Trump’s announcement of a trade deal with Japan that includes a 15% tariff on Japanese exports. Speaking in Kochi, Uchida said the central bank would raise rates if economic and inflation trends align with its projections, but warned that U.S. tariffs could undermine Japan’s wage growth and stall tightening.
“The BoJ needs to adjust monetary policy to best balance the upside and downside risks,” he said. Uchida also pointed to rising domestic political uncertainty, following the ruling Liberal Democratic Party’s upper house election setback, as another factor weighing on policy decisions. While policymakers raised rates by 25 basis points in January, it has since refrained from signaling further hikes, despite persistent inflation fueling expectations.
