TOKYO: A Bank of Japan policymaker has pointed to the need for the central bank to extend its novel coronavirus measures, which are currently set to expire at the end of March next year.

In a recent interview, Toyoaki Nakamura, a member of the central bank’s Policy Board, said, “While I thought that the coronavirus pandemic will settle down, the ‘third wave’ of infections is quite big.”

On the coronavirus measures introduced in and after March by the BOJ, including cash flow support measures for companies, Nakamura said, “It would be difficult for us to end the measures in March (2021).”

Nakamura also said that the BOJ does not need to expand such measures at the current moment.

He, however, added, “The economy tends to change significantly if something big happens.”  Nakamura suggested that the BOJ will discuss actions flexibly, based on the coronavirus infection situation.

Earlier this month, the BOJ announced a policy to tack on an additional interest rate for current account deposits at the central bank for regional banks that are working on improving their finances through mergers and other ways.

Regional banks “don’t (necessarily) have to merge with” other financial institutions, Nakamura said, voicing his hopes for an improvement in operation efficiency at regional financial institutions also through loose cooperation and other means.

On Japan’s economy and prices, Nakamura said that the country “has built up psychological resistance” to the coronavirus and economic activities are gradually picking up.

“The BOJ, like other central banks around the world, has been actively pursuing monetary policies and an easy state (of the money market) has been maintained,” Nakamura said.

On issues concerning monetary policies, including those for a world after the pandemic, Nakamura said that the BOJ will need to support the macroeconomic environment so that structural reforms will not be delayed.

JIJI Press