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Global central bankers will gather in Tokyo on Tuesday for a conference discussing two pertinent matters: economic growth and inflation. The annual symposium, hosted by the Bank of Japan (BOJ) and its affiliated research institute, is Japan’s version of the Federal Reserve’s Jackson Hole summit but heavy on academic and policy gravitas. The two-day meeting, held at the BOJ’s headquarters in central Tokyo, convenes top officials from central banks, including the US Federal Reserve, the European Central Bank (ECB), the Bank of Canada, and the Reserve Bank of Australia.  Tariff pressures, inflation, and policy changes According to sources familiar with the matter, this year’s agenda is titled “New Challenges for Monetary Policy,” which discusses the problems of central bankers globally. Economists believe tailwinds and headwinds have become unpredictable because of the US tariff policies changes under President Donald Trump. Some central banks are raising interest rates to rein in inflation, but others are cutting rates to support economic growth, fearing Trump tariffs will stifle demand and discourage spending. The BOJ, even with growing inflationary pressures, has only gradually begun tightening monetary policy after decades of ultra-loose conditions. Japan’s annual inflation rate was steady at 3.6% in April 2025, the lowest level since December.  The central bank intends to continue lifting rates and trimming bond purchases, but given how US tariffs have changed in the course of two months, some market watchers believe Japan is facing stagflation because the BOJ is “too slow.”  “While the BOJ may be forced to stand pat for a while, it doesn’t need to ditch rate hikes altogether,” said Nobuyasu Atago, a former BOJ official and current chief economist at Rakuten Securities Economic Research Institute.  Stubborn inflation and unsteady market growth In April, Japan’s core consumer inflation hit a two-year high of 3.5%, largely driven by…

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Filed under: News - @ May 26, 2025 1:23 pm