By Makiko Yamazaki and Kentaro Sugiyama
TOKYO (Reuters) – Bank of Japan Governor Kazuo Ueda said on Thursday he met Prime Minister Shigeru Ishiba for a regular exchange of views on the economy and financial markets.
Ueda also said he would likely attend the G7 and G20 finance leaders’ meeting to be held next week in Cape Town, South Africa.
“I will probably attend next week’s G7 and G20 meetings. I took this opportunity for informal exchange of views just before doing so,” Ueda told reporters after his meeting with Ishiba, which was the first between the two since October last year.
Ueda said the two did not discuss recent rises in long-term interest rates.
Japan’s prime minister and central bank governor have held meetings about once every few months for regular discussions on the economy and financial markets.
Policymakers of the G20 major economies gathering in Cape Town next week will likely debate the global fallout from U.S. President Donald Trump’s tariff policies.
Trump said on Wednesday he will announce tariffs related to lumber, cars, semiconductors and pharmaceuticals “over the next month or sooner,” a move that could hurt Japan’s export-reliant economy.
A Reuters poll showed almost nine out of 10 Japanese companies expect Trump’s policies to negatively affect business.
Higher U.S. tariffs could also keep the country’s inflation elevated and diminish the chance of interest rate cuts by the Federal Reserve.
Consequently, a strong dollar could keep the yen weak and boost Japan’s import prices, thereby affecting the timing and pace of future interest rate hikes by the BOJ, some analysts say.
Japanese government bond yields have risen steadily this week, as markets factor in the chance the BOJ could hike rates more aggressively than initially thought on prospects of sustained increases in wages and prices.
A majority of economists polled by Reuters expect the BOJ to raise interest rates to 0.75% in July or September.
It is uncertain whether Japanese Finance Minister Katsunobu Kato will attend next week’s G20 gathering, as Ishiba’s minority coalition continues negotiations with opposition parties to pass next fiscal year’s budget through parliament.
A source has told Reuters that U.S. Treasury Secretary Scott Bessent will skip the G20 meeting.
(Reporting by Makiko Yamazaki, Kentaro Sugiyama, Yoshifumi Takemoto and Rocky Swift; writing by Leika Kihara; Editing by Christopher Cushing and Sam Holmes)
