FX.co ★ BoJ Should Hike Rates After U.S. Tariff Impact: Board Member Takata

The Bank of Japan should consider resuming its interest rate hikes following a temporary pause designed to evaluate the effects of U.S. tariffs on Japan's economy, board member Hajime Takata stated in a speech on Thursday. "In my opinion, the BoJ is simply taking a break from its series of policy interest rate increases," he commented, suggesting that the bank should eventually move away from its current ultra-loose policy after a "wait and see" period. Takata noted that Japan is approaching its 2% inflation target, driven by strong corporate profits, labor shortages, and increasing wages. Although he anticipates this outlook will remain "broadly" consistent even after President Trump's comprehensive tariff declaration on April 1, Takata highlighted the importance of monitoring potential risks. "Considering the high degree of uncertainty surrounding various U.S. policies, the BoJ needs to implement monetary policy with greater flexibility while avoiding excessive pessimism," he remarked. He also cautioned that if the Federal Reserve resumes rate cuts, it could limit the BoJ's policy options. Nevertheless, Takata does not foresee signs of a U.S. recession similar to previous economic crises.