BoJ's Ueda: Uncertainty from trade policies heightened sharply

Bank of Japan (BoJ) Governor Kazuo addresses a press conference on Thursday, explaining the Bank’s decision to maintain the interest rate at 0.50% for the second consecutive meeting.

Additional quotes

• Uncertainty from trade policies heightened sharply.
• Report compiled based on the assumption that global supply chain disruption would be avoided.
• Japan's economy is recovering moderately, although some weak moves are seen.
• Japan's economic growth likely to moderate.
• Must pay due attention to financial, fx markets, impact on Japan's economy, prices.
• BoJ expected to keep raising rates if economy, prices move in line with projections.
• To judge whether outlook will be achieved without any preconception.
• Trade policies announced in each region likely to push down economies.
• Expect underlying inflation to cool down due to tariffs, slow global growth.
• Economic, price projections could change vastly depending on how countries deal with US tariffs.
• Virtuous cycle of wages and prices will continue due to continued labour shortages.
• Outlook is not as certain as it was before.
• Timing of underlying inflation to achieve 2% goal will be somewhat delayed.
• Difficult to judge when likelihood of achieving underlying inflation goal, will be flexible in policy response.
• If big change to tariff policy, that would affect monetary policy outlook.
• Economy roughly on track so far.
• Monetary policy operations done through controlling short-term rates
• Our projections factor in some progress in tariff negotiations.
• Mid-term evaluation of JGB buying would suggest plans after april 2026.
• 'Not simple' in achieving underlying inflation target as before.
• Fair amount of possibilities of revising our outlook based on data.
• Board members including me generally assuming that reciprocal tariffs would not be at either extreme.
• Expect US tariffs to be above the base 10% levied.
• There is a high possibility of revising our outlook depending on various assumptions and data because certainty of outlook is low.
• There are some degree of possibilities of prices overshooting our central forecast.
• Hard to make decision now on response to situations resembling stagflation.
• Hard to say when degree of uncertainty on tariffs would come down.
• Uncertainty around tariff impact on economy remains high even after tariffs are finaliszd.
• It is not that we have to wait until winter time bonuses, spring wage talks to decide about anything.
• Still under consideration on ETFs.
• US has said it wants to finish tariff negotiations within 90 days, that would be one marker.
• Even when US tariffs are decided, the impact would be hard to read.
• Timing of next rate hike could be swayed a lot depending on impact of tariffs on economy.
• Tariffs could negatively affect corporate profits, and affect winter bonuses and wage negotiations next year.
• But it doesn't mean we have to wait for all of that to be clear to make a policy decision.
• Timing of trend inflation does not necessarily correlate with timing of rate hike.

Market reaction

USD/JPY remains strongly bid following these comments. The pair was last seen trading 0.98% higher on the day near 144.30.