Trump's tariffs "threaten" the globe, Bank of Japan warns of increasing economic uncertainty

According to the Zhitong Finance APP, the Bank of Japan has stated that as some companies worry about the impact of increased tariffs from the United States on profits, the uncertainty facing the Japanese economy is increasing. This indicates that the tariff policy fully implemented by President Donald Trump may undermine Japan's moderate economic recovery process.

On Monday, during the quarterly meeting of the Bank of Japan's regional branch managers, the central bank maintained its economic assessment for nine regions, believing that the economies in various areas are recovering or gently rebounding.

However, the central bank pointed out in a statement that "the uncertainty of the Japanese economy is intensifying," highlighting the Bank of Japan's concern that Trump's tariff policy may threaten the virtuous cycle of rising wages and prices in Japan, which is a key prerequisite for further interest rate hikes.

Although the statement did not directly mention the increase in U.S. tariffs, it warned that "some companies are concerned about the impact of U.S. trade uncertainty on output and profits."

A Bank of Japan official stated at a press conference that the central bank's assessment of the regional economy is based on surveys conducted by its branches across the country and has not fully incorporated the impact of the reciprocal tariff policy announced by Trump last week.

The Bank of Japan painted a relatively optimistic picture of the economic outlook, stating that strong consumption by overseas tourists and robust demand for luxury goods are supporting consumption activities. The central bank also noted that companies are maintaining strong capital expenditure plans.

The statement mentioned that the range of wage growth across various industries in different regions is expanding, although some small businesses in certain areas are cautious about further wage increases.

The statement pointed out that "companies are continuously passing on rising import costs at a moderate pace," and some companies are considering or have already implemented price increases to raise funds to cope with the rising labor costs.

Due to investor concerns that Trump's tariff policy may lead to rising prices, weakened demand, and push the global economy into recession, Asian stock markets fell sharply on Monday.

Trump's decision to impose a 25% tariff on automobile imports and a 24% reciprocal tariff on other Japanese goods is likely to deal a significant blow to the Japanese economy, which heavily relies on exports. Analysts predict that these high tariffs could reduce Japan's economic growth rate by as much as 0.8 percentage points.

The Bank of Japan's assessment of the regional economy will be one of the key factors reviewed at the next policy meeting scheduled for April 30 to May 1. It is expected that the Bank of Japan's board will keep the interest rate unchanged at 0.5% and release new quarterly economic forecasts