Bank of Japan (BoJ) Governor Kazuo Ueda reiterated a measured approach to monetary policy on Monday, signaling that the central bank remains committed to achieving its 2% inflation target while closely monitoring evolving economic and financial conditions.
Speaking on the heightened uncertainty facing Japan’s economy, Ueda stated, “The BoJ will take appropriate monetary policy decisions to stably achieve the 2% inflation target, while scrutinizing economic, price, and financial developments without any preconception.”
US Tariff Risks Cast Shadow Over Japan’s Outlook
Ueda’s comments come as escalating US tariff measures inject renewed volatility into the global economy. He warned that the US tariff policy “has heightened global Japanese economic uncertainty sharply” and is likely to place downward pressure on both the global and domestic economies through multiple channels.
While acknowledging that tariffs could exert mixed effects on prices—both upward and downward—Ueda stressed that Japan’s economic trajectory will hinge largely on how US trade policy unfolds in the coming months.
Market Reaction: Yen Extends Gains
Following Ueda’s remarks, the Japanese Yen strengthened further against the US Dollar. The USD/JPY pair remained under pressure, trading below the 143.00 mark and down 0.44% on the day. Investors interpreted Ueda’s cautious tone as a sign that the BoJ may continue its tightening path, especially if inflation remains persistent.
As uncertainty over US trade moves continues to dominate market sentiment, the Yen—traditionally viewed as a safe-haven currency—appears poised to benefit from risk-off flows.
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