Bank of Japan Governor Kazuo Ueda: If U.S. tariffs harm the economy, the central bank may need to respond

Bank of Japan governor Kazuo Ueda said the central bank may need to take policy action if U.S. tariffs hurt Japan's economy, suggesting the central bank could pause its rate hike cycle. Ueda said the risks surrounding U.S. President Donald Trump's policies since February were "closer" to the bad scenario envisioned by the BoJ, adding that recent developments had affected business and household confidence. He said the BoJ would continue to raise interest rates "at an appropriate pace" if economic and price developments were in line with the BoJ's forecasts. "But we will carefully review the extent to which U.S. tariffs could harm the economy without preconceptions," he said. "A policy response may be necessary. We will make appropriate decisions based on the evolution of events." The remarks reinforced the prevailing view in the market that the Bank of Japan will hold off on raising interest rates at its next policy meeting from April 30 to May 1, from the current rate of 0.5%. (Jin Ten)