Recap: BOJ’s Nakagawa warns on tariff dangers, says Tankan survey key for outlook

BOJ’s Nakagawa flagged U.S. tariff dangers and mentioned the upcoming Tankan survey will probably be key for assessing sentiment. The Financial institution is conserving a data-dependent stance, with markets nonetheless betting on one other price hike this yr after its July inflation improve.

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Extra:

Financial institution of Japan board member Junko Nakagawa warned that uncertainty over U.S. tariff coverage stays a major danger to Japan and the worldwide financial system. She pointed to the upcoming Tankan survey as a key gauge of how commerce tensions are filtering via to company sentiment.

Nakagawa mentioned the central financial institution would proceed to scrutinize information carefully and alter financial coverage as wanted. A former Nomura Asset Administration chair, she is thought to be impartial on coverage.

The background to her speech:

• The BOJ ended its large stimulus final yr and raised charges to zero.5% in January, judging that inflation was nearing its 2% goal.
• Though the Financial institution held regular in July, it lifted its inflation forecasts and struck a extra optimistic tone on development, conserving alive expectations for one more price hike this yr.
• A majority of analysts count on a minimum of a 25bp hike earlier than year-end, up from simply over half in July

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Earlier:

• BOJ’s Nakagawa: Uncertainty stays excessive on affect of tariffs

This text was written by Aaron Cutchburt at investinglive.com.