The Bank of Japan will continue to express caution about U.S. tariffs’ economic effects in its upcoming quarterly report but will present a more positive outlook than previous guidance according to sources who understand its perspective.
The central bank will probably continue to stress that American trade policy poses significant risks but recent economic data from both the United States and China along with stable domestic investment and output may lead to a more positive short-term economic forecast.
According to the source the BOJ needs to remain alert but there is no solid proof that tariffs have caused damage to Japan.
The BOJ will publish its report after its July 30–31 meeting during which the interest rate is predicted to stay at 0.5%. The market will analyze the bank’s economic projections to determine when the next rate hike might occur.
Earlier concerns were more severe. During April when Trump introduced extensive tariff announcements the BOJ predicted that worldwide demand and export activities would decline. The “tankan” business sentiment survey along with regional branch updates show no immediate negative effects on the economy.
The upcoming report will present a dual perspective by maintaining a careful stance toward geopolitical risks while recognizing Japan’s ability to resist external shocks.
