The Bank of Japan (BOJ) yesterday revised down its growth forecasts and held interest rates steady, warning that trade tariffs were fueling global economic uncertainty.
BOJ Governor Kazuo Ueda said that it was difficult to assess the impact of the sweeping levies imposed by US President Donald Trump and retaliatory measures by affected nations.
“The level of uncertainty will be significant,” Ueda said. “Even when the overall framework of the tariffs is decided, it will still be the implementation of tariffs of an unprecedented scale.”
Photo: Bloomberg
Trump’s hardball campaign to rectify what he says are unfair trade imbalances includes tariffs on trading partners, and imports such as steel and automobiles.
The BOJ said it now expects Japan’s GDP to rise 0.5 percent this fiscal year, which started in April, down from its previous estimate of 1.1 percent.
In the next fiscal year, GDP is expected to expand 0.7 percent, down from its previous forecast of 1.0 percent.
“Japan’s economic growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors,” the bank said.
However, “factors such as accommodative financial conditions are expected to provide support” and “thereafter, Japan’s economic growth rate is likely to rise,” it said.
The BOJ’s decision to stand pat on interest rates following a two-day policy meeting had been widely expected. Its key rate is still much lower than the US Federal Reserve’s 4.25 percent to 4.5 percent and the Bank of England’s 4.5 percent.
UBS Group AG economists said ahead of the BOJ policy meeting that “market fragility and uncertainty in the global economy due to the US tariff/trade policies” would lead the bank to hold rates, while Capital Economics Ltd analysts said more interest rate increases could still be on the table later this year.
Japanese tariff talks envoy Ryosei Akazawa was to hold a second round of negotiations later yesterday in Washington, seeking to secure relief from the trade levies.
“Fruitful negotiations between Washington and Tokyo to mitigate the impact of tariffs on exporters may help Japanese policymakers in hiking interest rates,” Sumitomo Mitsui Trust Holdings Inc senior strategist Katsutoshi Inadome said.
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
Taiwanese prosecutors suspect that three people successfully smuggled at least one shipment of Nvidia Corp artificial intelligence (AI) chips to China after first exporting them to Japan, people familiar with the matter said. The trio was detained last week by the Keelung District Prosecutors’ Office for allegedly falsifying documents related to exports of Super Micro Computer Inc servers containing advanced Nvidia chips, which the US has barred from sale to China without a license from Washington. The move marked Taiwan’s first public crackdown on AI chip diversion after years of pressure from the US to take a more active role in curtailing
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) employee bonuses are likely to grow more than 30 percent this year, in line with the past few years as the company’s profits continue to set new records, an anonymous source cited TSMC chairman C.C. Wei (魏哲家) as saying yesterday. TSMC, the world’s largest contract chipmaker, is committed to taking care of its workers, the source said, citing Wei’s meeting with employees yesterday morning. Wei also expressed gratitude to employees for their contribution to the company’s improving bottom line, the source added. Since 2023, TSMC’s employee bonuses have grown at an annual rate of
RSS