Trade fears loom: Japanese firms cautious despite BOJ’s positive economic outlook

Reuters

Some Japanese firms are voicing concern over U.S. trade policy uncertainty, fearing it may impact profits and production, the BOJ said. Despite a steady recovery across regions, global trade tensions continue to cast a shadow over Japan’s outlook.

Some Japanese firms are increasingly worried about the uncertainty surrounding U.S. trade policy, which they fear could affect their profits and production, the Bank of Japan (BOJ) said in a statement released on Monday. The remarks followed a quarterly meeting of the BOJ's regional branch managers.

In its latest report on regional economies, the BOJ maintained that all nine areas are either recovering or picking up moderately. Strong consumer spending—driven by robust demand for luxury goods and a continued influx of overseas tourists—has helped support the country’s economic momentum. Businesses also remain confident, with solid capital expenditure plans in place.

However, the central bank noted that “some firms voiced concern over the impact on output and profits” from the uncertain direction of U.S. trade policy, despite not explicitly mentioning recent tariff increases.

The report also highlighted a broadening trend of wage increases across various sectors, although smaller firms in some regions expressed hesitation about implementing further pay rises. Additionally, companies are passing on rising import costs at a moderate pace, with some considering further price hikes to cover increasing labour expenses.

The BOJ's report reflects both cautious optimism and lingering concerns over global trade volatility.

Tags

Comments (0)

What is your opinion on this topic?

Leave the first comment