Analysts: U.S. auto tariffs reduce chances of Bank of Japan rate hike in May

observers of the Bank of Japan stated that the new car tariff measures announced by US President Trump significantly reduce the likelihood of the Bank of Japan raising interest rates at the May meeting. Atsushi Takeda, Chief Economist at Itochu Research Institute, said, "The possibility of a rate hike in May is even lower, and the Bank of Japan must carefully study the impact of tariffs on the economy. They are unlikely to complete this work before the May meeting." At the time of the US announcement, the Bank of Japan was looking for a suitable opportunity to raise interest rates, as consumer inflation continues to hover above the target. A 25% tariff will put pressure on the core component of the Japanese economy, the automotive industry, and could potentially affect a wider range of industries. Katsutoshi Inadome, Senior Strategist at Sumitomo Mitsui Trust Asset Management, said, "US car tariffs are not favorable for the Bank of Japan to raise interest rates early, and long-term interest rates may fall below 1.5%."