BoJ’s Nakagawa says the Bank expects to continue raising rates as economy, prices improve

BOJ policy board member Junko Nakagawa Speech at a Meeting of the Okayama Club.

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Bank of Japan policy board member Junko Nakagawa said the central bank will continue making policy decisions cautiously, weighing global trade uncertainty and the uneven effects of U.S. tariffs on Japan’s economy.

Nakagawa said the BOJ will take into account the high degree of uncertainty surrounding global trade policy when determining future moves. She noted that Japanese companies are maintaining capital expenditure appetite despite the impact of tariffs and external risks, reflecting corporate resilience and steady investment plans.

On domestic conditions, Nakagawa said household consumption remains firm overall, though demand for non-durable goods is weakening due to rising food prices. She added that services spending has levelled off after a period of moderate growth.

Nakagawa said the BOJ continues to see medium- and long-term inflation expectations gradually rising toward its 2% target, and that the bank’s baseline view on the overseas economy remains unchanged.

Her comments suggest the BOJ remains patient and data-dependent as it gauges how tariff-related disruptions and higher import costs filter through to corporate investment, consumption, and inflation dynamics.