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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 20th 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.

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