In the hour or so after Japan hiked interest rates to what is the highest level in 17 years, nobody seemed to care.

News agencies filed their copy, mentioning core inflation accelerating to 3% and a brief period of turbulence for the yen in trading versus the dollar but that was it.

Indeed, what has proven to be the third rate hike in under a year is most noticeable for going largely unnoticed; given that there was so little reaction from markets worldwide.

As such, rate hikes from the once ultra-conservative Bank of Japan are merely seen as highlighting its steady progress in normalising monetary policy.

With wages and prices in Japan both on an upward trend though, analysts now project further rate increases this year, potentially reaching 1% by December.

However, in a report from Reuters, it was claimed this forecast hinges on avoiding setbacks such as rising trade tensions or a stronger yen.

To this end, Japan’s sizeable trade surplus with the United States has placed Prime Minister Shigeru Ishiba in a tricky position, as he seeks to dissuade President Donald Trump from imposing additional tariffs on Japanese goods as have been hinted at by Trump. Such tariffs, analysts warn, could deliver a severe blow to Japan’s export-driven economy.

As a result, Ishiba faces the difficult task of now replicating the diplomatic approach of his predecessor, and close friend of Trump, the late Shinzo Abe, who cultivated a strong personal bond with the US president. Abe’s charm offensive, which included rounds of golf, was instrumental in aligning Japan’s interests with those of the US.

Commentators in Tokyo have suggested Ishiba follow a similar strategy, with his first visit to Washington expected next month; a common practice being for Japanese prime ministers to head to Washington as soon as possible after an inauguration.

To strengthen his position, Ishiba, can, reports suggest, point to Japan’s substantial economic contributions to the United States. Japanese companies have invested heavily in the states, recording significant acquisitions last year and backing large-scale projects such as AI infrastructure initiatives. Despite occasional challenges, these investments underline Japan’s role as a key economic partner.

On defence, Ishiba’s government has already approved a record military budget, which includes substantial funding for US-made missile systems, something sure to please the White House.

Japan might also consider tightening restrictions on the export of advanced technology to China to prevent it one day being used against regional neighbours such as Japan, Taiwan and countries bordering the South China Sea as well as the US in the event of conflict.

And although this could impact some Japanese manufacturers, it may help stave off broader trade penalties from Washington, for the time being at least.