Bank of Japan’s Ueda says US tariffs could have big impact on global trade

[TOKYO] Bank of Japan (BOJ) governor Kazuo Ueda said US tariffs could have a significant impact on trade activity in affected nations, although for now the overall picture of the policies remains unclear ahead of an official announcement later in the global day.

“Depending on the size and area of the tariffs, it’s possible they will have a large impact on trade activities among nations,” Ueda said in response to questions in parliament on Wednesday (Apr 2). “Another big point is how household and business sentiment will be affected by them, influencing overall spending.”

Ueda’s first public comments since US President Donald Trump officially unveiled a 25 per cent auto tariff last week suggest he continues to monitor developments while refraining from offering any hints as to whether he’s become more or less cautious over the BOJ’s rate hike path.

Details from Trump regarding so-called reciprocal tariffs on US trading partners are expected to be unveiled at a time that corresponds to the early hours of Thursday in Tokyo.

“It’s unfortunate but uncertainties are high so we will be closely watching developments of policies to grasp their economic impacts more precisely,” Ueda said.

Ahead of the latest levies, Japan’s authorities have been rushing to prepare for potential impacts. Prime Minister Shigeru Ishiba on Tuesday introduced support measures for businesses that include the establishment of 1,000 consultation booths across the nation.

Japan’s economy has so far developed in line with the BOJ’s economic outlook. The latest quarterly Tankan survey published on Tuesday showed that business confidence remains relatively robust even with US levies clouding the outlook.

In a Bloomberg survey last month, a majority of economists forecast authorities will next lift the benchmark rate in June or July. After a barrage of reports related to US tariffs, traders now see the chance of a rate hike at the next meeting ending May 1 at around 16 per cent as at Wednesday, plunging from around 26 per cent a week ago. BLOOMBERG