The Bank of Japan (BOJ) is reportedly set to say that the potential impact of rising US tariffs will not disrupt the ongoing cycle of wage growth and inflation, a key element for continuing to hike interest rates.
The approach is expected to be included in the BOJ's quarterly outlook report to be published on May 1, Reuters reported on Monday, citing sources.
According to the report, it is difficult at this point to accurately estimate the extent of the economic damage that could result from the tariffs imposed by US President Donald Trump.
However, the growing labor shortage is expected to continue to push Japanese companies to raise wages.
The report also said that while risks have indeed increased, they are not yet serious enough to warrant a comprehensive revision to the BOJ's baseline scenario, which currently expects a modest economic recovery.
