The growing list of the main economies that warns about Waker’s growth due to US tariffs has a new member.
The Bank of Japan said Thursday that he expects the Japanese economy to grow 0.5 percent in the fiscal year that began on April 1. That is a strong The 1.1 percent reduction of the Central Bank had predicted in January.
When explaining the change, the Bank of Japan cited “commerce and other policies” that lead to a slowdown in economies abroad and a decrease in national corporate profits. The perspective was published together with an announcement that the Central Bank would maintain interest rates without changes in 0.5 percent.
The tariff threats of President Trump are weighing the economic perspectives around the world. In April, the International Monetary Fund reduced its 2025 perspective for all groups of 7 nations, including Germany and Japan, third -year -old economies in the world, largely due to US tariffs.
In Japan, Mr. Trump’s new taxes on imports, including a 25 percent rate in imported cars, are already weighing a lot in the economy. The country is also preparing for potentially higher levies on the board of 24 percent, which the prime minister has said that it causes a national crisis if they were not negotiated lower.
Although Japan has changed much of its manufacturing base abroad in recent decades, it still exports a substantial amount of products, such as cars, to the United States. The articles produced by Japanese companies outside Japan and then sent to the United States also face the threat of higher rates.
Japanese companies, many of which will inform the full profits of the fiscal year at the end of this month, are already warning or deteriorating the profits.
Last month, Uniqlo’s Japanese operator reduced his earning forecast for the second half of the year until August in approximately $ 70 million, anticipating that tariffs will harm their US businesses. Uniqlo manufactures many of its products in countries such as China, Vietnam, Indonesia and India that also face higher rates.
On Wednesday, the United States government said the US economy had been reduced in the first three months of the year. And a report on the manufacturing activity in China showed that Chinese factories had experienced a more acute monthly slowdown approximately one year.
In Japan, tariff interruption, exacerbant of pressures is in a fragile economy of Allamy.
With inflation hitting food and salary increases overcome during most of the last three years, Japanese consumers have been reluctant to spend. Weak consumption caused the growth rate for adjusted inflation in Japan to decrease to 0.1 percent in 2024, below 1.5 percent of the previous year.
American tariffs are also complicating the efforts of the Bank of Japan to reverse more conventional monetary policies, as stated Thursday to keep stable interest rates.
For decades, the Central Bank maintained interest rates to less than zero to push Japan’s economy from a persistent weak growth cycle and deflation pressure. The objective of these rock background rates was to encourage spending and generate moderate levels of inflation.
The Bank of Japan obtained part of his desire with an explosion of inflation stimulated by the hooks of the Covid-19-19 pandemic supply chain and the geopolitical clashes. These higher prices allowed the Central Bank to increase interest rates for the first time in 17 years in March 2024. It increased rates again in July and January and had pointed out the intention of continuing the trend.
Now, Mr. Trump’s tariffs threaten the assumptions of sustained economic recovery and inflation on which the Central Bank had said it would be that decisions to continue increasing the rates.
Some economists expect an economic deceleration induced by the rate to cause a similar decrease in prices. On Thursday, the Bank of Japan projected that the central prices of Japan, which did not have fresh foods, would increase by about 2.2 percent this fiscal year, compared to its previous prognosis or 2.4 percent.
