Japan Faces Tough Choices on Inflation, Wages, and U.S. Tariffs

Japan Faces Tough Choices on Inflation, Wages, and U.S. Tariffs

Japan’s central bank is under pressure as the country battles slowing growth, declining real wages, and now US tariffs. In May, real wages dropped by 2.9% despite Japan’s biggest salary hikes in over 30 years. Why? Inflation hit 3.5%, well above the Bank of Japan’s 2% target. Japan’s economy also shrank 0.2% last quarter, the first contraction in a year, mainly due to weaker exports. Meanwhile, 25% US tariffs on Japanese goods are set to kick in on August 1st, adding more pressure to Japan’s trade reliant economy. Analysts are split. Some say the BOJ may need to raise rates to strengthen the yen and tame inflation. Others believe the better move is to stay patient and let trade uncertainties pass. Governor Waya says Japan can handle it, but all eyes are now on the BOJ’s next move.

Real wages down, tariffs up, and inflation still high, Japan’s central bank is walking a tightrope. Here’s what’s happening. #BOJ #JapanEconomy #Wages #Tariffs #TikTokNews