The new auto tariffs announced by US President Donald Trump greatly reduce the likelihood of the Bank of Japan lifting its benchmark interest rate at the May 1 conclusion of its next board meeting, according to BOJ watchers.

“The likelihood of a May rate hike has gotten even lower,” said Atsushi Takeda, chief economist at Itochu Research Institute. “The BOJ must carefully examine the impacts of the tariffs on the economy. There is no way they can finish that by the May meeting.”