Former Bank of Japan Governor Kuroda urged calm in response to Trump’s tariffs, saying Japan should “sit down and respond” rather than overreact to frequent U.S. policy shifts.
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He criticised the tariffs as inflationary and self-defeating, warning they could hurt U.S. consumption and growth and lead to 4–5% inflation by early autumn.
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Kuroda noted that uncertainty from U.S. policy is already discouraging U.S. business investment, potentially weighing on long-term U.S. growth.
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While acknowledging downside risks, Kuroda said Japan could benefit if U.S.-China tariffs shift demand toward Japanese exports.
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He dismissed speculation of a second Plaza Accord, noting no current discussion about weakening the dollar, despite recent market volatility.
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On BOJ policy, Kuroda backed Governor Ueda’s normalization steps, calling the move away from deflation “appropriate,” but cautioned that rate hikes may slow due to global uncertainty.
This article was written by Eamonn Sheridan at www.forexlive.com.