Japan Weekly: Stalling trade negotiations may delay BoJ rate hikes

We still expect a trade deal with the US to be agree upon after the Upper House elections on 20^th July. However, given that very few countries have managed to reach an agreement so far, the negotiations may drag on for longer and may result in a higher US tariff than the current baseline of 10%. The upshot is that despite mounting upside risks to inflation, the Bank of Japan could resume its tightening cycle later than our current forecast of October.