Ripple Effects: How Trump's Tariffs Impact Japan's Economic Landscape

The Bank of Japan highlights growing uncertainty in Japan's economy due to U.S. tariffs imposed by President Trump, which could disrupt a moderate recovery. Regional branch managers express concerns over potential impacts on profits and corporate sentiment, predicting a challenging economic landscape ahead.

The Bank of Japan has expressed increasing concern over the uncertainty facing Japan's economy. This follows apprehensions from some companies about the effect on profits stemming from higher U.S. tariffs, a move by President Donald Trump that threatens to disrupt the country's moderate economic recovery.

During a quarterly meeting, the BOJ maintained that all nine regions were recovering or improving moderately. Yet, the central bank emphasized rising uncertainty, fearing Trump's tariffs could jeopardize rising wages and prices, essential for further interest rate hikes.

BOJ Osaka branch manager Kazuhiro Masaki noted that these policy-driven tariffs are unprecedented, making it difficult to gauge potential impacts. Other regional managers echoed concerns about the looming threat to corporate earnings and the wider economy, as seen by declines in Asian markets and Japan's Nikkei index.

(With inputs from agencies.)