Bank of Japan Governor Kazuo Ueda stated on Tuesday that the central bank will not aggressively pursue interest rate hikes unless there is a clear improvement in economic conditions and price levels. Speaking during a parliamentary session, Ueda highlighted that economic uncertainty remains “extremely high,” citing the impact of elevated U.S. tariffs. He emphasized that the Bank of Japan will not raise rates merely to create room for future monetary easing, and monetary policy will remain flexible as long as economic conditions do not support upward rate movements. These remarks follow the bank’s decision to cut growth and inflation forecasts for the current fiscal year and maintain short-term interest rates at approximately 0.05% during consecutive meetings in May. Ueda also warned that trade tensions stemming from U.S. tariffs imposed by President Donald Trump could slow global economic growth and reduce profits for local companies, reinforcing the bank’s cautious approach to future rate hikes.
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