BOJ may keep raising rates, with eye on tariff risks, deputy governor says

Bank of Japan Deputy Governor Shinichi Uchida said on Friday the central bank will keep raising interest rates if the chance of underlying inflation achieving its 2% target heightens, while keeping a close eye on risks from higher U.S. tariffs.

Global stock prices tumbled on Thursday after U.S. President Donald Trump's announcement of sweeping tariffs ignited fears of an all-out trade war and a global economic recession.



The introduction of the U.S. tariffs will likely affect global and Japanese economies through various channels including through trade, business confidence and financial market moves, Uchida told parliament.

Through such channels, the tariffs are likely to exert downward pressure on global and Japanese economies, he said. While the tariffs could push down prices by cooling economic growth, they could work to accelerate inflation by affecting global supply chains, Uchida said. We will raise interest rates and adjust the degree of monetary support if the economy continues to improve, and heighten the chance of underlying inflation accelerating toward our 2% target, Uchida said.

We will examine at each policy meeting, without any preconception, whether our (economic and price) forecasts would be achieved in deciding monetary policy, he added..