Bank of Japan Gov. Ueda Says ‘Uncertainty Is Quite Large’

The Yomiuri Shimbun

16:05 JST, April 2, 2025

The results of the latest Tankan survey released by the Bank of Japan on Tuesday are likely to impact the central bank’s decision on whether to raise interest rates again.

In the survey, the figure for “change in output prices” rose slightly for large enterprises in both the manufacturing sector — a 28-point rise — and in the nonmanufacturing sector — a 32-point rise. It appears that the environment is conducive to companies passing on price increases, and price rises are becoming more persistent.

The figure was calculated by subtracting the percentage of companies that answered that sales prices would “fall” from the percentage of companies that answered that sales prices would “rise.”

The inflation outlook in the private sector also expects the rate of price increase to be 2.3% year-on-year in ***the next*** five years for the “all enterprises / all industries” category. The BOJ aims to achieve a stable rate of price increase of 2%, excluding temporary factors such as rises in the price of rice.

The results of the survey apparently confirm that economic and price conditions are progressing as the BOJ expected.

Regarding the economic conditions overseas, the full extent of the tariff policy of U.S. President Donald Trump’s administration is not yet clear. It appears the Tankan survey did not fully grasp the policy’s impact on Japanese companies.

At a press conference in March, BOJ Gov. Kazuo Ueda indicated his intention to closely monitor the situation regarding the U.S. policy.

“The uncertainty is quite large,” Ueda said.

The BOJ plans to analyze business sentiment based on information gathered from companies at a meeting of general managers of the bank’s branches nationwide to be held Monday.

At the next Monetary Policy Meeting to be held from April 30 to May 1, the BOJ will compile the Outlook for Economic Activity and Prices, also known as the Outlook Report. The bank will update its inflation outlook in the report.

“In order to assess the impact of Trump’s tariffs, the BOJ is expected to raise interest rates once every six months, with a July rate hike being the most likely scenario,” said Daiwa Securities Co. economist Kento Minami.