Japan said on Tuesday the trade agreement it struck with the U.S. cleared uncertainties on U.S. trade policies but continued attention needs to be given to risks of those policies putting downward pressure on the Japanese economy.

The government says price increases show Japan is clearly not in the deflation that plagued the economy for more than 20 years. However, it says US tariffs are a new threat and may drag on growth.

The Bank of Japan is expected to hold rates steady during a two-day policy meeting that starts Wednesday. Although Japan and the United States achieved a breakthrough in trade talks last week, analysts said the central bank will likely maintain its cautious stance for some more time.

Trump believes he can deploy tariffs without tradeoffs or distortions. In reality, each new tariff move creates both.

Devoted fans of Asian cosmetics will often buy direct from Asia and wait weeks for their packages to arrive because the products typically cost less than they do in American stores. Rather than stocking up on their favorite sunscreens, lip tints and toners, some shoppers are taking a pause due to the tariff uncertainty.

Most imports will be more expensive as the president settles on tariff rates up to 20% — the highest they've been in nearly a century.

With the president’s new trade deals, US protectionism is slowing investment and rewiring supply chains at the expense of the global economy