Bank of Japan Governor Kazuo Ueda: If US tariffs harm the economy, the Central Bank may need to respond.

On April 16, Bank of Japan Governor Kazuo Ueda said that if U.S. tariffs hurt the Japanese economy, the central bank may need to take policy action, suggesting that the central bank may pause the interest rate hike cycle. Kazuo Ueda said the risks surrounding US President Donald Trump's policies have been "closer" to the bad scenario envisioned by the Bank of Japan since February, adding that recent developments have affected the confidence of businesses and households. He said the Bank will continue to raise interest rates "at an appropriate pace" if economic and price developments are consistent with the BOJ's forecasts. "But we will scrutinize the extent to which U.S. tariffs could hurt the economy without preconceptions," he said. "A policy response may be necessary. We will make appropriate decisions according to the changes in the state of affairs. "The comments reinforced the prevailing view in the market that the Bank of Japan will hold off on rate hikes at its next policy meeting from April 30 to May 1, with the current rate at 0.5%.