The Bank of Japan keeps monetary policy steady and maintains its optimistic price forecasts, signalling its confidence that a steady economic recovery will accelerate inflation to its 2 percent target without additional stimulus. But, as Ciara Lee reports, Trump's policies could prove problematic.
Outrage over Donald Trump's immigration policies not dying down. These U.S. nationals gathered in Tokyo. Not far away Trump and his plans also on the minds of the Bank of Japan, particularly his protectionist trade stance. SOUNDBITE) (Japanese) BANK OF JAPAN GOVERNOR, HARUHIKO KURODA, SAYING: "We do fear that various of his conservative policies may shrink global trade and slow down the growth of the global economy." But the bank kept monetary policy steady, and maintained its optimistic forecasts. It also left unchanged a loose commitment to buy government bonds at the current pace. A steady economic recovery is expected to accelerate inflation to its 2 percent target without additional stimulus. But some think it should start tapering. (SOUNDBITE) (English) JASPER LAWLER, SENIOR MARKET ANALYST AT LCG , SAYING: "The fact that it is becoming too much of a big player in its own domestic markets, and is getting to the point where the Japanese policy is having some positive benefit, but the risks of it going wrong are getting to the stage where it really needs to pull back a bit." A pick-up in global demand has helped Japanese exports recover, raising bets the BOJ's next move may be to hike rates. But Trump has taken direct aim at Japan's powerful auto industry, which is crucial to the Japanese economy Japan is thought to be hammering out plans to show Trump its firms are ready to create U.S. jobs. Prime Minister Shinzo Abe will visit Washington next Friday for talks with Trump - automotive trade expected to be top of the agenda.