Bank of Japan (BoJ) Governor Kazuo Ueda has issued a cautionary statement regarding the potential impact of United States President Donald Trump’s tariff policies on the Japanese economy. In an interview with Sankei newspaper, Ueda described the current trade environment as a “bad scenario” and hinted at the possibility of a monetary policy response.

Ueda emphasized that while no immediate action is being taken, the central bank is closely monitoring the situation and stands ready to respond if necessary. “Although a policy response may be necessary depending on the situation, we will make an appropriate decision depending on the changing situation,” he stated.

The comments underscore growing concern among Japanese policymakers about the ripple effects of rising trade protectionism and tariffs imposed by the United States. Trump’s levies, part of a broader strategy to reshape global trade relations, have raised uncertainty for key economic partners, including Japan.

The Bank of Japan’s approach remains cautious but alert, signaling that any countermeasure would be data-driven and situation-specific. Analysts view the central bank’s stance as a warning that international trade tensions could begin influencing domestic monetary policy decisions in Japan.

With global markets already reacting to U.S. tariff developments, Ueda’s remarks highlight the potential for central banks to factor geopolitical shifts into their economic frameworks. Japan’s readiness to act if needed places additional pressure on the international economic landscape, which continues to adjust to Trump’s assertive trade policies.