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Atsushi Takeda, chief economist at Itochu Research Institute, revealed that the new auto tariffs by U.S. President Donald Trump reduced the likelihood of BOJ lifting its benchmark interest rate. The BOJ had planned to raise interest rates at the May 1 conclusion of its next board meeting, but economists argue that the recent U.S. trade policies might prevent that possibility. He also argued that the BOJ should carefully examine the impacts of the tariffs on the economy. Takeda believes that “there is now way they can finish that by the May meeting.” Trump’s auto tariffs reduce the likelihood of rate hikes by BOJ Look, Trump is wavering the tariff flag and everyone is scared and if you look at what people project the impact of his tariffs on inflation is, well, it’s somewhere between 0 and 1%. The BOJ JPY policy has been a bigger tariff on imports – it popped inflation to 4% in Jan and… — Trinh (@Trinhnomics) March 21, 2025 Atsushi Takeda, chief economist at Itochu Research Institute, acknowledged that the new auto tariffs from the U.S. reduced the likelihood of the Bank of Japan raising its interest rate at its next board meeting. Takeda said that “the likelihood of a May rate hike has gotten even lower.” Trump’s heightened trade policies came at a time when the BOJ was seeking the right opportunity to lift rates as consumer inflation continued to exchange hands above its target. The economist said that the 25% tariffs will weigh on Japan’s auto sector and will have the potential to ripple across a broader set of industries. Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management, argued that the 25% tariffs on cars imported into the U.S. were a headwind for the BOJ to raise interest rates early. Inadome also…

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Filed under: News - @ March 27, 2025 12:22 pm