BoJ slashes growth forecast amid US tariffs as it holds rates at 0.5%

Rise in inflation

The Bank of Japan has reduced its growth outlook for the country, citing “trade and other policies” as a reason for its decision.

According to the central bank, US tariffs will lead to a "slowdown in overseas economies and to a decline in domestic corporate profits", however it noted there will be "accommodative financial conditions" to provide support. Following this, the BoJ forecast the country's economic growth rate to rise as overseas economies return to a moderate growth path. Japanese inflation is also expected to be impacted by tariffs, as the central bank noted the consumer price index is forecast to be in the 2-2.5% range this year, and drop to 1.5-2% in 2026 and to 2% in 2027. BoJ unanimously holds...