BoJ’s Takata sees “True Dawn” for Japan, urges caution but not pessimism on tariffs

BoJ board member Hajime Takata said in a speech today that Japan may finally be emerging from decades-long economic stagnation. Reflecting on the structural decline since the 1990s, driven by the collapse of the bubble economy and intensifying global competition, Takata noted that while firms built resilience through deleveraging and restructuring, this also entrenched a low-investment, low-wage, and low-price “norm”.

Takata argued Japan is “finally beginning to break free of this norm”. Recent shifts in corporate pricing and wage behavior suggest Japan could be on the cusp of a sustained recovery. Still, he warned that US tariff policies risk derailing progress, recalling how similar global shocks in the 2000s repeatedly interrupted Japan’s economic revivals.

Yet’s Takata’s confident that this time could mark a “true dawn” and emphasized that being “overly pessimistic also poses a considerable risk”. He noted that the BOJ should maintain its accommodative stance for now, but also continue “gradually and cautiously” transitioning policy as conditions allow. Japan, he said, has a history of enduring far more intense trade tensions and should avoid falling into excessive pessimism.

Full speech of BoJ’s Takata here.