Nakamura del Boj: Economic uncertainty increases, so a cautious policy approach is necessary

The member of the Bank of the Bank of Japan (BOJ), Toyoaki Nakamura, said Friday that “uncertainty about economic perspectives is increasing, so a cautious approach to monetary policy is necessary.”

• Additional quotes
• The US trade policy, foreign economies and the FX affect the economy of Japan, so they must be taken into account when establishing monetary policy.
• But the medium and long -term perspective on Japan’s foundations must also be taken into account when establishing politics.
• The risk of Japan in front of a negative salary inflation is not large.
• The increase in food prices could affect the underlying inflation, so it should be alert.
• The obstacle to reducing salary divergence between large and small businesses remains high.
• The downward pressure on the economy of Japan is increasing due to the slow global growth and the worsening of profits in the automotive, fundamental sector.
• Companies are postponing more and more and adopting a waiting position regarding their capital investment plans due to uncertainty about US tariffs.
• If the delays in capital investment are expanded, that could boost companies to move their supply chains abroad to deal with supply restrictions.
• Japan is in a critical phase to completely leave the deflation.
• It is appropriate to maintain stable monetary policy at the moment.
• Increasing rates prematurely when growth is decreasing could stop consumption and capital investment.
• Japan’s economy has recovered moderately, but some weakness has been observed.
• The economy faces a growing downward pressure due to the implementation of US tariff policies.
• Greater uncertainties derived from the tariff policies of the United States. Uu. They could represent serious challenges for Japan.
• The future development of companies is being closely monitored to see if they will change their position towards the contraction of their businesses through cost reduction.
• There is a polarization in the salary posture between large and small businesses.
• The impulse for salary increases has accelerated, but could weaken depending on the impact of US tariff policies.
• Private consumption has lacked impulse due to price increases and household increases.
• Economic growth is expected to be moderate.
• It is considered that accommodative financial conditions provide support.
• It is extremely uncertain how commercial policies and others will develop in each jurisdiction and how economic activity and prices abroad will react to these policies.
• It is necessary to pay attention to the fact that uncertainty is high for the perspectives of the foreign economy, the prices affected by various commercial policies.

Market reaction

At the time of publication, the USD/JPY is negotiating -0.21% on the day about 145.40.