The Bank of Japan lowered its growth forecast by more than half and paused its efforts to raise interest rates.

TOKYO—The Bank of Japan halved its growth forecast for the Japanese economy as U.S. tariffs begin to bite, highlighting how President Trump’s efforts to rewire U.S. trade are hitting economies around the world.

The Bank of Japan revised down its growth forecasts and held interest rates steady on Thursday, warning that trade tariffs are fuelling global economic uncertainty.