According to the Zhitong Finance APP, on Wednesday, the Bank of Japan maintained its stance as expected and expressed increasing concern about the potential impact of escalating trade tensions on the global economy. The monetary policy committee of the Bank of Japan voted to keep the policy interest rate unchanged at 0.5%, a result that aligns with the expectations of all surveyed economists.
ING (International Netherlands Group) stated that the Bank of Japan's statement indicates that its assessment of inflation and growth has not changed significantly. The statement placed greater emphasis on the uncertainty surrounding U.S. trade policy. Governor Kazuo Ueda also commented multiple times on tariff risks during the press conference. Ueda indicated that he would watch how the U.S. tariff issue develops, suggesting that the market may lean more towards a rate hike in July rather than in May.
ING is more focused on Ueda's remarks regarding recent wage negotiations, which, while in line with expectations, were still stronger than anticipated. The Bank of Japan is closely monitoring potential upward risks to inflation. Additionally, the recent rise in Japanese government bonds reflects the market's response to developments in inflation and economic data.
Ueda believes that now is not the time for the central bank to intervene in the bond market, indicating a bias towards tightening. By sending mixed signals of hawkishness and dovishness, the Bank of Japan may retain some operational flexibility for future policy meetings. ING believes that unless the tariff issue escalates further than already disclosed, the Bank of Japan's priority should focus on inflation, consumption, and wage growth.
Bank of Japan Observation
Preliminary results from the spring labor negotiations indicate that wage growth is expected to exceed 5% again this year, which will support the Bank of Japan's desired virtuous cycle of wage growth and sustainable inflation. The Bank of Japan hopes to see how companies pass on rising input prices to retail prices. Typically, companies raise prices in April, the first month of the fiscal year.
Therefore, the upcoming inflation data is a key focus. Tomorrow's CPI inflation is expected to decline from 4.0% in January to 3.5% year-on-year in February, due to the government's restoration of energy subsidies and the stabilization of fresh food prices.
ING expects this easing to be temporary, with inflation rising again in March and April. More importantly, attention should be paid to the April Tokyo CPI data, which will be released a few days before the Bank of Japan's April/May meeting. If April Tokyo inflation accelerates as ING expects, the likelihood of a rate hike in May will increase

The Bank of Japan maintains its policy interest rate at 0.5%, in line with economists' expectations. Governor Kazuo Ueda expressed concerns about the uncertainty of U.S. trade policies, and the market may be more inclined towards a rate hike in July. ING pointed out that wage growth is expected to exceed 5%, supporting sustainable inflation. The upcoming April CPI data will be crucial, with inflation expected to drop from 4.0% in January to 3.5% in February, but ING believes this easing is temporary

- The Bank of Japan maintained its policy rate at 0.5%, aligning with economists' expectations, while expressing concerns over the global economic impact of escalating trade tensions.  
- ING noted that the central bank's assessment of inflation and growth remains largely unchanged, with an emphasis on the uncertainty of U.S. trade policies.  
- The upcoming Tokyo CPI data in April is crucial, as a rise in inflation could increase the likelihood of a rate hike in May.

The Bank of Japan maintains the interest rate at 0.5%. ING: April Tokyo CPI becomes the key factor for a rate hike in May