BOJ’s Uchida Flags Trade-Driven Downside Risks Despite U.S.–Japan Deal

Bank of Japan Deputy Governor Shinichi Uchida said the Japanese and global economies are at a "critical juncture," with risks to growth and inflation skewed to the downside amid persistent trade-policy uncertainty. Speaking on 23 July, Uchida warned that the impact of existing and potential tariffs remains difficult to gauge, adding that "extremely high" uncertainty over U.S. trade actions could weigh on corporate profits and wage gains in Japan. Uchida welcomed the recently concluded U.S.–Japan trade pact, saying it reduces uncertainty for Japanese companies. However, he cautioned that the central bank must still monitor how tariff policies evolve and could adjust monetary settings to balance upside and downside risks to prices and activity. The BOJ will continue raising rates only if the economy and inflation progress as projected, he said, emphasizing that policymakers will reassess their outlook "without preconceptions" should trade conditions deteriorate.