Growing market speculation over a potential Bank of Japan rate hike in October is underestimating the degree of uncertainty wrought by U.S. President Donald Trump’s tariff campaign, according to a former chief economist of the central bank.
"All I’m saying is that uncertainties are bigger than what market participants are probably thinking,” Toshitaka Sekine said in an interview Thursday in Tokyo. "If I were still the BOJ chief economist, I would say ‘no’ if asked to determine by October” what the likely impact of the tariffs will be.
Sekine spoke after signs of economic resilience prompted economists to list October as their most likely timing for the next BOJ rate increase. The veteran economist said he wouldn’t rule out a move entirely, as a range of factors including foreign exchange rates will play into the decision. Still, it will be difficult for authorities to claim economic risks have receded enough by that juncture.
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