The leader of a key opposition party in Japan said the central bank may have to reverse course on policy, not only putting aside any notions of hiking interest rates but also being prepared to mull a cut to the benchmark if U.S. tariffs damage the economy.
“Japan may need to take complete economic measures via monetary easing depending on the situation,” Democratic Party of the People leader Yuichiro Tamaki told reporters Tuesday in Tokyo. This isn’t the time for a rate hike, he added.
Tamaki’s remarks come as the market view regarding the Bank of Japan’s rate trajectory has shifted sharply. Until early last week many economists forecast a hike by June or July, with the possibility of a move as early as the next decision on May 1. U.S. President Donald Trump’s so-called reciprocal tariffs prompted economists to push that timeline back, with doubts now about whether BOJ can hike again at all this year.
