BoJ’s Ueda says US tariffs likely to exert downward pressure on Japan, global economies

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

Bank of Japan Governor Kazuo Ueda said early Friday that US tariffs are likely to exert downward pressure on Japan and the global economies.


Key quotes


US tariffs are likely to exert downward pressure on Japan, global economies.

Hard to say now how US tariffs will affect Japan’s price moves.

Will closely monitor US tariff impact on Japan, overseas economic and price developments in deciding monetary policy.

We will scrutinise data, including from hearings, available at the time of each policy meeting to gauge US tariff impact on Japan’s economy, prices.

We will guide monetary policy appropriately from the standpoint of sustainably achieving 2% inflation target.

When the external environment changes sharply, our growth and price forecasts will change, so will guide monetary policy accordingly in an appropriate manner.


Market reaction  


At the press time, the USD/JPY pair is up 0.17% on the day to trade at 146.33.


Bank of Japan FAQs


The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.


The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.


The Bank’s massive stimulus  caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.


A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
Nonfarm Payrolls forecast: US job growth set to ease in March amid economic uncertaintyThe all-important United States (US) Nonfarm Payrolls (NFP) data for March will be released by the Bureau of Labor Statistics (BLS) on Friday at 12:30 GMT.
Author  FXStreet
13 hours ago
The all-important United States (US) Nonfarm Payrolls (NFP) data for March will be released by the Bureau of Labor Statistics (BLS) on Friday at 12:30 GMT.
placeholder
Wall Street’s winning sessions are rubbing off on Asian stock marketsWall Street closed higher on Tuesday, and that gain flowed straight into Asia by Wednesday morning. The S&P 500 went up by 0.16% to end at 5,776.65, extending Monday’s rally.
Author  Cryptopolitan
Mar 26, Wed
Wall Street closed higher on Tuesday, and that gain flowed straight into Asia by Wednesday morning. The S&P 500 went up by 0.16% to end at 5,776.65, extending Monday’s rally.
placeholder
U.S. consumer expectations hit 12-year low as economic worries mountConsumer confidence in the U.S. has plummeted, with the expectations index hitting 65.2 in March, the lowest level in 12 years.
Author  Cryptopolitan
Mar 26, Wed
Consumer confidence in the U.S. has plummeted, with the expectations index hitting 65.2 in March, the lowest level in 12 years.
placeholder
Trump approves the ‘D.O.G.E dividend’ tax refund for US taxpayersPresident Donald Trump just signed off on a tax refund plan that could send billions back into the pockets of Americans. The ‘D.O.G.E Dividend’, named after Elon Musk’s Department of Government Efficiency (D.O.G.E), will return 20% of the savings from Musk’s cost-cutting initiative directly to taxpayers. Trump confirmed the plan during a Miami Beach event […]
Author  Cryptopolitan
Feb 20, Thu
President Donald Trump just signed off on a tax refund plan that could send billions back into the pockets of Americans. The ‘D.O.G.E Dividend’, named after Elon Musk’s Department of Government Efficiency (D.O.G.E), will return 20% of the savings from Musk’s cost-cutting initiative directly to taxpayers. Trump confirmed the plan during a Miami Beach event […]
placeholder
US JOLTS job openings expected to decline slightly in DecemberThe Job Openings and Labor Turnover Survey (JOLTS) will be released on Tuesday by the United States (US) Bureau of Labor Statistics (BLS).
Author  FXStreet
Feb 04, Tue
The Job Openings and Labor Turnover Survey (JOLTS) will be released on Tuesday by the United States (US) Bureau of Labor Statistics (BLS).
Real-time Quote