Boj Politics Maker warns of the risks of commercial policy, and looks forward to Tankan to obtain guidance

Written by Macco Yamaguchi and Takaya Yamaguchi

Talkio/Shimmoski (Reuters) -Junko Nakagawa, a member of the Board of Directors of Japan, said on Thursday that the constant uncertainty resulting from the US tariff policies can be heavier than commercial and family feelings, which is practicing a possible traction on the Japanese and global economy.

Despite a trade agreement reached between Japan and the United States and progress in trade talks between other major economies, “there are still many uncertainty cases,” Nakagawa said in a speech to business leaders in the city of Shimonoski in western Japan, Yamaguchi province.

As a result, “commercial and family feelings around the world” can be affected, which “can push local and foreign economies in turn.”

Nakagawa repeated that BOJ will continue to raise interest rates if the economy is in line with its expectations, but stressed the need to carefully evaluate the data in making policy decisions given the increasing uncertainty.

In particular, Nakagawa emphasized the importance of the upcoming “Tankan” results from “Tankan” morale in BOJ to measure the impact of commercial negotiations between the main economies on Japanese companies.

Nakagawa said at a press conference later in the day, that the semester Tankan poll was “very important” because it offers an insight into corporate morale plans and capital spending.

The next Tankan Wipe will be released on October 1.

Nakagawa president who was previously known about Nomura Asset Management, Nakagawa is neutral in her position on the money policy.

After leaving an enormous incentive that was held from a decade of time last year, BOJ raised interest rates to 0.5 % in January, Japan was on the threshold of achieving the goal of inflation by 2 %.

BOJ has kept fixed prices in July, but she reviewed inflation expectations and offered a less depressive look at the economy, while maintaining market expectations alive to raise this year.

However, high food inflation and continuous wage growth prospects led to some members of the Bo -Board of Directors to warn of the effects of prices in the second round that may require high prices, as a summary of the bank’s meeting showed in July.

Nakagawa also indicated on Thursday that the rising pressure on wages may continue to increase prices, which in turn will affect morale and inflation.

“We need to remain vigilant against the risk of widespread upward pressure to prices, including those of services and expediting inflation sharply,” Nakagawa told reporters.

She said that while the risk of overcoming the curve “is not particularly high at the present time,” caution justifies that the interaction between wage growth and inflation is more dynamic than it was in the past.

Nearly two -thirds of the Reuters economists in August in August expect that BOJ will raise the main interest rate by 25 basis points again later this year, up to a little more than half a month.

(Participated in the reports of Mackeco Yamazaki in Tokyo and Takaya Yamaguchi in Shimonoski; edited by Jacqueline, Wong and Shari Navarinam)