Bank of Japan Governor Kazuo Ueda commented early Wednesday on the potential impact of U.S. tariffs, stating that while they are likely to push U.S. inflation higher in the short term, they could ultimately weigh on prices in the longer term by slowing economic growth.
Key points from his remarks:
Ueda noted that the extent of the impact will depend on the size of the tariff hikes, which could significantly affect trade activity between countries.
He acknowledged that while U.S. tariffs may drive inflation up in the near term, they could suppress U.S. prices in the long run by cooling economic growth.
Another key consideration, Ueda said, is how tariffs could influence household and corporate sentiment, which could, in turn, impact the global economy.
He also mentioned that more clarity on U.S. tariff policy is expected later this month during the IMF/G20 meetings, where finance leaders are likely to share views and debate approaches.
Market Reaction: At the time of reporting, the USD/JPY currency pair was up 0.19%, trading at 149.88.
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