Japan’s central bank policymakers are expected to keep rates on hold this week, despite the trade deal with the U.S. relieving some uncertainty over tariffs and strengthening the case for tighter policy.

The new U.S.-Japan trade deal lowers tariffs and strengthens economic ties, helping challenge China's regional aggression and instability.

The deal imposes 15% tariffs on Japanese cars and other goods, one of the more favorable rates. While the start date and other basic elements are still unknown, Treasury Secretary Scott Bessent warned this week that the US would monitor implementation and bump the rate up to 25% if Trump isn’t satisfied.