- US policy, overseas economies, FX do affect Japan's economy and prices
- So that must be taken into account in monetary policy setting
- Japan's economy has recovered moderately but some weakness still seen
- Economy is facing mounting downward pressure due to US tariffs policy
- Momentum for wage hikes has accelerated but could weaken depending on US tariffs policy
- Companies are increasingly adopting wait-and-see stance on capex due to US tariffs
- Uncertainty over economic outlook is heightening
- Cautious monetary policy approach is necessary
- Hiking rates prematurely when growth is slowing could curb consumption
- It is extremely unclear how trade and other policies will unfold
TLDR: US tariffs have stuck a wrench in their plans. Now, they are on the sidelines waiting to see how tariffs will impact the economy and respond accordingly.
