By Leika Kihara
OSAKA (Reuters) -Bank of Japan Governor Kazuo Ueda said on Friday the central bank will scrutinise whether the impact from U.S. tariffs and prolonged overseas economic uncertainty could discourage companies from raising wages.
Ueda reiterated the central bank’s resolve to continue raising still-low interest rates if the economy and prices move in line with its forecasts.
But he said there were various uncertainties surrounding Japan’s economic outlook, such as growing signs of labour market weakness in the United States and the expected impact of higher U.S. tariffs on Japanese corporate profits.
“If uncertainty regarding overseas economies and trade policies remains high, firms may place stronger emphasis on cost-cutting and may weaken their efforts to reflect price increases in wages,” Ueda said in a speech to business leaders in the western Japan city of Osaka.
“The future course of the U.S. economy and the conduct of monetary policy could significantly affect Japan’s economy and prices,” Ueda said. “We will therefore continue to closely monitor the situation,” he added.
The Japanese yen weakened 0.2% to 147.60 per U.S. dollar after Ueda’s comments.
(Reporting by Leika Kihara; Additional reporting by Ankur Banerjee in Singapore; Editing by Muralikumar Anantharaman and Sam Holmes)
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