The Bank of Japan has decided to keep Japan’s interest rates at 0.5%, in part due to the uncertainty surrounding President Trump’s tariffs.
Speaking at a press conference after announcing it will hold the rate, Bank of Japan Governor, Kazuo Ueda, said: “In the past month or so, there have been rapid changes in the scope and speed of US tariffs. However, there are aspects we may not know even beyond April, so uncertainty remains high.”
The monetary policy report also said: “Concerning risks to the outlook, there remain high uncertainties surrounding Japan’s economy and prices including the evolving situation regarding trade and other policies in each jurisdiction.”
Trump has already imposed US tariffs on steel and aluminium with a blanket duty of 25%. He ended exemptions that the US had previously granted for shipments from some countries.
That followed an order earlier in March that raised levies on Chinese imports into the US to at least 20%.
In response to the imposition of the new US tariffs on EU steel and aluminium imports, the European Commission launched swift countermeasures on US imports into the EU.
Trump’s 25% across-the-board tariffs on Canada and Mexico did come into effect for two days at the start of March but then Trump confirmed the US would pause tariffs on goods and services compliant with the United States-Mexico-Canada Agreement until April 2.
On April 2, The Trump administration will give countries a proposed tariff rate based on their own rates, non-tariff trade barriers and other factors.
