TOKYO, June 11 (Reuters) – Japan’s government has once again highlighted concerns regarding the potential impact of U.S. tariffs on economic growth. In its monthly report issued on Wednesday, officials emphasized the need to monitor how these tariffs could affect corporate profits. Starting in July, Japan faces pressure from a 24% U.S. import levy unless negotiations reduce the rate. Additionally, Japan is seeking an exemption for its car manufacturers from a separate 25% tariff on vehicle imports. Japan’s GDP contracted by an annualized 0.2% in the first quarter, even prior to the announcement of reciprocal tariffs by U.S. President Donald Trump on April 2. The Cabinet Office’s June report noted that while the economy is recovering moderately, uncertainties persist due to U.S. trade policies. The report also pointed out that rising prices continue to pose risks to household sentiment and consumption. Although corporate profits are showing signs of recovery, the report added a note about possible disruptions from trade policies. An official stated that the full impact of U.S. tariffs might only become clear in data from the April-June quarter or later. While no major effects on Japan’s export volumes have been observed yet, trends from May onward warrant attention. Regarding wages, this year’s spring pay negotiations likely resulted in an average increase of over 5%, surpassing last year’s figures, although smaller firms lag behind larger ones. Prime Minister Shigeru Ishiba recently pledged to boost Japan’s average income by more than 50% by 2040 ahead of next month’s upper house elections.
— new from Reuters
