BoJ’s regional branch managers reported that while higher US tariffs have yet to significantly dent Japan’s exports or factory activity, companies are starting to hold back on capital expenditure.
Uncertainty over US trade policy, driven by President Trump’s rapid and unpredictable tariff announcements, has made it difficult for firms to fully assess the potential economic impact. While concrete damage has not yet materialized, the lack of clarity is beginning to influence strategic planning. “Many regions saw companies voice concern about slumping demand from rising US sales prices and a slowdown in the global economy,” BoJ said.
Wage developments are another key theme in the survey. The outlook is split: some companies foresee the need to raise wages to attract and retain talent, while others are already hinting at bonus cuts should profit margins come under pressure.
