Bank of Japan policymakers agreed on the need to keep raising still-low interest rates, but some saw the need to pause for the time being due to uncertainty over U.S. trade policy, minutes of their April 30-May 1 policy meeting showed on Friday.
At the meeting, the BOJ kept interest rates steady at 0.5% but sharply cut its growth and inflation forecasts due to the expected hit on Japan's economy from higher U.S. tariffs.
While the board agreed to keep raising interest rates if the economy resumes a recovery, some said the timing for Japan to see underlying inflation converge toward the BOJ's 2% target has been pushed back by around a year, the minutes showed.
The board was divided on the future inflation path.
While some warned that cheap Chinese imports could push down Japan's prices, others said inflation could overshoot the BOJ's projections as companies have become more willing to raise prices and wages, the minutes showed.
U.S. President Donald Trump's sweeping tariffs appeared to dominate discussions with some board members predicting the BOJ would enter a holding pattern until there was more clarity on Washington's trade talks including with Japan.
"The BOJ must maintain a wait-and-see approach until developments in U.S. tariff policy become somewhat settled," one member was quoted as saying.
Another member said the BOJ would pause for now but shouldn't be too pessimistic and stand ready to resume rate hikes "in response to policy changes in the United States," the minutes showed.
