The Bank of Japan should be flexible and data-dependent in proceeding with any further interest-rate hikes as U.S. tariffs weigh on the economy and add to uncertainty, the International Monetary Fund urged.
"The main message we have on monetary policy is that in times of heightened uncertainty, flexibility and data dependence become paramount,” Nada Choueiri, the IMF’s Japan mission chief, said in an interview in Washington on Wednesday. The BOJ "will have to look at all the data and they will have to communicate very clearly to the markets how they are interpreting these data to explain their decisions,” she said.
Choueiri’s remarks followed the release of the IMF’s latest World Economic Outlook report on Tuesday — the first since U.S. President Donald Trump amped up his global tariff campaign. Along with downgraded global growth projections, the forecast for Japan’s expansion in 2025 was trimmed by 0.5 percentage points to 0.6%.
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