Bank of Japan Governor Kazuo Ueda said the central bank will continue raising interest rates if the economy and prices evolve in line with forecasts, but stressed that decisions will be made without preconceptions and with close attention to risks.

Ueda flagged that Japan’s growth is likely to moderate before picking up as overseas economies recover, while tariff policies are creating uncertainty. He cautioned that a 15% U.S. tariff rate would weigh on Japan’s economy, corporate profits, and wage-setting behaviour.

The governor said the BOJ will scrutinise whether its baseline forecasts for prices and growth materialise, assessing both upside and downside risks, as global developments remain unpredictable. He highlighted that while the U.S. economy continues moderate growth, a slowdown in employment is becoming clearer, which may signal deteriorating corporate profits are starting to hit jobs and incomes.

Ueda added that the momentum to pass higher prices into wages could weaken if uncertainty over trade and external demand persists. He also noted that Japanese companies’ business strategies under the new U.S. tariff regime will take time to become clear.

Overall, Ueda maintained the need for an accommodative policy environment to support growth while balancing the risks from global trade frictions, overseas demand, and domestic wage dynamics.

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Comments reinforce BOJ’s cautious tightening bias amid external risks. Take special note of his comments on Japanese wage growth momentum possibly weakening. The BoJ want s wage-price reinforcing spiral to support inflation at 2% target.

USD/JPY popped but only to near resistance circa 147.60.