BY SATOSHI SUGIYAMA
TOKYO — The Bank of Japan will forego another interest rate hike this year due to uncertainty over US tariff policy, according to a slight majority of economists in a Reuters poll who expect the next 25-basis-point increase in early 2026.
Japan’s central bank will slow the pace of tapering its government bond purchases from next fiscal year, a majority also said, while three in four surveyed expect the government to cut down on issuance of super-long bonds.
The latest results reflect policymakers’ apprehension at a time when US President Donald Trump’s erratic tariff policies are threatening the economic outlook and as investors are increasingly concerned about Japan’s public finances.
The BOJ is still pushing for tighter monetary conditions, contrasting with its peers tilting for rate cuts, with its governor Kazuo Ueda stressing the central bank’s readiness to keep raising interest rates if underlying inflation approaches its 2 percent target.
“If trade negotiations between the United States and other countries progress, global economic activity is likely to pick up,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
“The timing of policy interest rate hikes is now more likely to be delayed compared to previous projections, but the BOJ is expected to implement an additional rate hike in the first quarter of 2026.”
None of the 60 economists in the June 2-10 survey expected the BOJ to raise rates at its upcoming policy meeting on June 16-17.
