Nada Choueiri, deputy director of IMF’s Asia Pacific Department, told Reuters that BoJ is likely to delay further interest rate hikes as heightened uncertainty from US tariff policy weighs on business sentiment and economic outlook.
She noted that many Japanese firms are now hesitant to move forward with investment plans, opting instead to wait for greater clarity on global trade developments. “This is postponing investment decisions as well,” Choueiri said, adding that the downside risks to both growth and inflation have increased.
“We do see that if our reference scenario materializes, the BoJ interest rate increases will be pushed backwards in time,” she said.
Choueiri also commented on the recent appreciation of Yen, reaffirming its role as a “safe-haven currency”, supported by the country’s economic stability and predictability.
