Ueda, from Japan, sees ‘bad scenery’ and consistent reaction against Trump

Governor of Banco do Japan states that the impact of tariffs already affects companies and families, and that Boj is ready to act politically according to the evolution of risks

Banco do Japan governor Kazuo Ueda said President Donald Trump’s fares campaign led the economy to a “bad scenario” that could force the Central Bank to take monetary policy measures, Sankei reported on Wednesday.

In an interview with Sankei, Ueda reiterated Boj’s political stance to raise interest rates if economic projections are realized. At the same time, he also indicated the possibility of political action while the Central Bank is still in the process of analyzing the economic and market situation.

“Although a political response may be necessary, depending on the situation, we will make an appropriate decision according to the changes,” Ueda said in the interview, held on Monday. He also stated that the authorities will continue to adjust the degree of flexibility if the economy and prices continue according to the bank’s expectations.

Ueda’s latest statements are aligned with the signs he has sent in Parliament, where he warned about low -economy pressures and increased uncertainties related to global trade developments.

Comments show that Boj is carefully monitoring US fees and evaluating their possible impacts, reinforcing speculation that the authorities will hardly consider an increase in interest in the short term. By reiterating the existing posture of seeking an increase if the conditions allow, Ueda signaled that the bank keeps its options open. Recent economic data suggested that the price trend was rising towards Boj’s goal – at least until Trump’s fares came into force.

The yen had volatility after the Sankei report.

“He made it clear that US tariff policy is a bad scenario, and the overall impression was more cautiously tone,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.

Ueda stated that while speculation that tariff measures could not be so negative, the situation has been heading for a bad scenario since February. The bank raised its basic rate to 0.5% in January.

Ueda’s comments take place at the time many economists reduced growth forecasts for Japan and reviewed expectations about the possibility of another Boj interest rates after Trump imposes higher rates than expected in some of the major Japanese exports, including cars.

Ueda said she will continue to evaluate the impact of tariffs on the economy through information collected at hearings with economic entities, as the data alone will not be enough.

“The feeling of some companies and families has already been affected,” Ueda said in the interview. “We will conduct our policy properly, according to changes in risk and projected assessment.”

It is widely expected that Boj keeps its settings unchanged in the next monetary policy decision on May 1.

With information from Bloomberg*