BOJ’s Nakagawa Signals Further Rate Hikes Amid Tariff Uncertainty

Bank of Japan board member Seiji Nakagawa said the central bank will keep raising its policy interest rate if its current projections for economic growth and inflation are achieved. He added that medium- to long-term inflation expectations are "rising moderately," reinforcing the case for a gradual withdrawal of monetary stimulus. Nakagawa cautioned that "high uncertainties" surrounding global trade policies—including the impact of recently implemented U.S. tariffs—could dampen business and household sentiment at home and abroad, potentially weighing on Japan’s economy. He emphasized that the results of the September Tankan survey will be critical for gauging how trade negotiations are influencing corporate activity. The BOJ will continue to base policy decisions on a careful assessment of incoming data, Nakagawa said.