Key Facts
• July 18, 2025: BOJ notes delayed impact of U.S. tariffs on the economy.
• July 30-31: BOJ to discuss raising 2025 economic growth forecast in policy meeting.
• May 2025 forecast: 2025 GDP growth projected at 0.5% year-on-year.
• June BOJ Tankan survey: No significant tariff impact observed yet.
• U.S. and Chinese economies performing stronger than May 2025 expectations.
• Some automakers avoid passing tariff costs to U.S. consumers, maintaining sales volume.
• BOJ expects GDP impact to remain minimal if automakers sustain production/export levels.
• Concerns persist over tariffs affecting wages and consumer spending in the long term.
• BOJ sees no major changes in economic and price trends through 2027.
Summary
The Bank of Japan (BOJ) anticipates a delayed economic impact from U.S. tariffs, with potential for a slight upward revision of the 2025 GDP growth forecast during its July 30-31 policy meeting. The May 2025 forecast projected a 0.5% year-on-year GDP increase. Recent surveys, including the June BOJ Tankan, indicate no immediate tariff effects, while U.S. and Chinese economies have outperformed earlier expectations. Some automakers have opted not to pass tariff costs to U.S. consumers, sustaining sales and minimizing GDP impact. However, concerns remain over potential long-term effects on wages and consumer spending. The BOJ maintains that economic and price trends are unlikely to shift significantly through 2027.
