By Leika Kihara

WASHINGTON (Reuters) – Bank of Japan Governor Kazuo Ueda stated on Thursday that the central bank will persist in raising interest rates if underlying inflation approaches its 2% target as anticipated.

However, he noted that the central bank will closely examine various information, including the potential economic impact of increased U.S. tariffs, which could influence the likelihood of sustainably achieving its price objective—an essential requirement for further interest rate increases.

Ueda mentioned that tariffs can affect the economy through various channels, such as dampening trade activity, cooling business sentiment, and increasing market volatility. He made these comments during a news conference after participating in the Group of 20 finance leaders’ meeting held amid the International Monetary Fund and World Bank Group meetings in Washington.

“Having exchanged views with policymakers from other countries, I felt that many shared similar perspectives on how tariffs impact their economies,” he stated.

Ueda indicated he would consider insights gained from discussions with global policymakers when assessing Japan’s economy and determining monetary policy.

“We will continue to raise interest rates if underlying inflation gradually converges toward our 2% target, as we project,” Ueda affirmed. “However, we intend to analyze incoming data without preconceived notions” in forming monetary policy.

Ueda’s remarks came ahead of the BOJ’s policy meeting next week, where the central bank is projected to maintain interest rates at 0.5% and revise down its growth forecasts.

The BOJ, which concluded a decade-long major stimulus program last year, raised its short-term interest rate to 0.5% in January, believing that the economy was on the verge of sustainably achieving the 2% inflation target.

While Ueda has indicated the BOJ’s willingness to continue raising rates, U.S. President Donald Trump’s tariffs have complicated decisions regarding when and how much to increase rates.

A senior International Monetary Fund official mentioned on Wednesday that the BOJ is likely to delay additional rate hikes as uncertainties caused by U.S. tariffs have heightened downside risks to growth and inflation.

In its World Economic Outlook, the IMF projected Japan’s economy to grow by 0.6% in 2025, marking a half percentage point decrease from its earlier forecast in January, largely due to the effects of U.S. tariffs.