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.

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.