Bank of Japan board members have signaled their intention for further rate hikes while citing the need to stay vigilant due to the potential economic impacts from U.S. tariff measures, according to a summary of opinions from their April 30 to May 1 meeting.

"The bank’s stance to continue to raise the policy interest rate is unchanged” given low real rates and the outlook for its price goal to be met, one of the nine board members said at the gathering, according to the summary released Tuesday, which doesn’t disclose speakers’ identities.

The written account of the BOJ gathering comes as risk appetite returns to global financial markets following the cooldown in U.S.-China tariff tensions on Monday. The release makes it clearer that the central bank intends to lift borrowing costs once trade uncertainty settles to an extent.

"How U.S. tariff policy will turn out and how firms respond to the policy are both fluid,” one board member said. "Therefore, the bank’s outlook for economic activity and prices can only be provisional at this point; it could be revised considerably depending on developments.”

Global markets have welcomed the U.S.-China detente, which saw unexpectedly large cuts to bilateral tariff rates. Japanese equities rose and the dollar strengthened, pushing the yen to its lowest level since early April.

At its latest meeting, the BOJ moved out its forecast for achieving its stable inflation target by a year and halved its projection for growth in fiscal 2025. Following those dovish signals, many BOJ watchers including Goldman Sachs and Barclays pushed back their calls for the timing of a next rate hike to later this year or 2026.

Tuesday’s summary and the latest tariff developments could prompt some analysts to bring their hike forecasts forward. Japan’s overall inflation has stayed above the BOJ’s target for three years and the central bank has assessed that the economy and price gains have developed in line with their outlook to date.

"While the Bank of Japan will enter a phase of pausing its policy interest rate hikes with a deceleration in the U.S. economy, it should not be too pessimistic, and it will be required to conduct monetary policy in a nimble and more flexible manner,” one board member said.