The Bank of Japan said in a regular news conference on May 1 that the reciprocal tariffs proposed by US President Donald Trump could slow down Japan’s economic growth.

It maintained its monetary policy unchanged to assess the consequences and the movements of the so-called “Trump tariff” and their impact on Japan and the global economy.

The newest outlook was based on the assumption that tariff negotiations between the US and other countries will progress.

However, it revised its outlook for economic growth and inflation rate downward for fiscal 2025 and fiscal 2026.

He stressed that uncertainty surrounding consequences and the movements of the tariff policies proposed by Trump remained high.

He also said that global economic growth could slow down, putting a downward pressure on Japan’s domestic corporate earnings.

Ueda stated that the virtuous cycle of increased wage and prices will continue as the serious shortage of workers remains, however, the growth rate will remain sluggish.