Bank of Japan keeps stable rates as Trump’s tariffs throw a shadow

The Central Bank of Japan held its key policy rate 0.5% in a unanimous vote on Wednesday.

The measure, which was in line with market expectations, occurs when the Bank of Japan evaluates the potential impact of the protectionist commercial policies of US President Donald Trump in his economy revolved to export.

“Japan’s economy has recovered moderately, although some weakness has been seen,” Boj’s policy formulators said in a statementciting “high uncertainties surrounding the economic activity and prices of Japan, including the evolutionary situation with respect to trade … and the salary behavior of national companies and the pricing behavior.”

“Inflation expectations have increased moderately,” said the BOJ, and said that “rice prices are likely to be at high levels and the effects of government measures that boost inflation will dissipate” during the tax year of 2025.

The Boj’s decision is ahead of the United States Federal Reserve Policies meetingwhere the Central Bank is expected to maintain its stable reference interest rate.

The BOJ increased short -term rates to 0.5% of 0.25% in January, its highest level since 2008After ending a mass stimulus program last year. The Central Bank has indicated its willingness to further increase rates if economic growth and inflation move in line with their projections.

The fees setting could discuss another increase in rates as soon as you can, due to concerns about inflationary pressure for salary earnings and third increases in food costs, some analysts said.

The largest union in Japan announced Friday that it managed to ensure an average 5.46% increase in salaries As of April, its greatest increase in more than three decades.

The Japanese union confederation, or Rengo, which has around 7 million members, said that the first tabulation of the results that cover 760 unions was 0.18 percentage points higher than last year’s increase of 5.28%.

Small to medium -sized companies saw an average increase of 5.09%, an increase of 0.67 percentage points compared to last year and the first time since 1992 that salary increases for such companies crossed the 5%mark.

UA Zensen, a general group that represents retail unions, restaurants and other industry unions, said that 139 of their member unions received An average increase of 5.37% in monthly salaries For full -time workers, a little less than the 2024%record of 5.91%.

Japan saw a High inflation rate at 4% In January, as well as Domestic spending exceeding expectations in Decemberwith an increase of 2.7% year after year.

The December figure was the fastest that spending at home had increased since August 2022, and the first year -on -year increase since July 2024. Home spending later slowed down in January to an increase of 0.8%.

The BAN has long reiterated that its goal is to see a “virtuous cycle” of growing prices in salaries in Japan.

However, the GDP figures launched last week seemed to complicate the way for the boxwood, with revised figures of the fourth quarter they show Japan’s economy grew 2.2% On an annualized base, a slower rhythm than Initially reported. The reviewed data also arrived in the average forecast of economists.

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