Bank of Japan governor: If U.S. tariffs hurt economy, central bank may need to respond

Mars Finance News: According to a report by Nikkei Sangyo Shimbun cited by Jinshi, Bank of Japan Governor Kazuo Ueda stated that the central bank might need to take policy actions if U.S. tariffs damage Japan's economy, hinting at a possible pause in the rate hike cycle. Ueda said that since February, risks surrounding President Trump's policies have become "closer" to the BOJ's worst-case scenario, adding that recent developments have affected business and household confidence. He said that if economic and price developments align with the BOJ's forecast, the bank will continue to raise rates "at an appropriate pace". "But we will carefully examine the potential economic damage from U.S. tariffs without preconceptions," he said. "Policy responses might be necessary. We will make appropriate decisions based on how the situation evolves." These remarks reinforce the market's mainstream view that the Bank of Japan will likely pause rate hikes at its next policy meeting on April 30-May 1, with the current rate at 0.5%.