BOJ to pause rate hikes through September amid Trump uncertainty: Reuters poll

Satoshi Sugiyama

Wed, May 14, 2025, 9:09 PM 3 min read

By Satoshi Sugiyama

TOKYO (Reuters) - Most economists present expect the Bank of Japan volition clasp involvement rates done September arsenic it pauses to measure the effects of U.S. tariffs, a Reuters survey showed, though a flimsy bulk inactive spot astatine slightest a 25-basis-point hike by year-end.

Those results echoed views expressed by BOJ rate-setters that U.S. President Donald Trump's sweeping tariffs person disrupted but not derailed the bank's endeavours for somewhat tighter monetary conditions, adjacent arsenic galore peers are leaning toward reducing borrowing costs.

In the May 7-13 survey, 95% of economists, 59 of 62, forecast nary alteration to involvement rates astatine the BOJ's adjacent argumentation gathering concluding connected June 17.

In a displacement from past month, 67% of economists, 39 of 58, expect borrowing costs to enactment astatine the existent 0.50% successful the July-September quarter. Around 36% of respondents, a minority, had anticipated nary alteration successful the involvement complaint during that play successful an April poll.

"The BOJ volition beryllium incapable to rise involvement rates for the clip being to measure the interaction of Trump's tariffs," said Masato Koike, elder economist astatine Sompo Institute Plus.

Still, 52% of respondents foresaw astatine slightest a 25-basis-point summation successful the cardinal complaint by the extremity of the year, the survey showed.

The median prediction for the end-September complaint was 0.50%, arsenic opposed to 0.75% successful the April poll, portion the end-December forecast remained unchanged astatine 0.75%.

"In the abbreviated term, the system volition dilatory down and the underlying complaint of ostentation volition moderate, but the virtuous rhythm of wages and prices is apt to continue," said Takumi Tsunoda, elder economist astatine Shinkin Central Bank Research Institute.

"If commercialized negotiations betwixt the U.S. and large countries progress, planetary economical enactment volition statesman to recover," Tsunoda said, adding the timing of the adjacent complaint hike is much apt to beryllium delayed compared to erstwhile projections.

Little changed from the April survey, 96% of respondents, 26 of 27, did not spot the request for the BOJ to chopped involvement rates.

Markets person priced a astir 19 ground constituent summation successful 2025, with the determination broadly expected by the extremity of the year.

BOJ lawman politician Shinichi Uchida told parliament connected Tuesday the cardinal slope expects wages and prices to support rising, adjacent arsenic uncertainty implicit U.S. tariff argumentation weighs connected the economy, keeping policymakers connected people to proceed raising involvement rates.

On April 2, Trump imposed a 10% tariff connected each countries but Canada, Mexico and China, on with higher tariff rates for galore large trading partners, including Japan, which faces a 24% tariff complaint starting successful July unless it tin negociate a woody with the U.S.