TOKYO: The Japanese economy has been affected seriously by the fallout from the new coronavirus outbreak, Bank of Japan Governor Haruhiko Kuroda said Thursday.
Uncertainty over the outlook of the economy is “extremely high,” Kuroda also said in a speech at a quarterly meeting of the central bank’s local branch managers.
On the recent financial market turmoil caused by fears over the virus, Kuroda said, “Tensions have eased to a certain degree, but the market sentiment is still nervous.”
The governor noted that companies are facing growing funding difficulties and expressed the BOJ’s readiness to make efforts to ensure smooth corporate financing.
“We will take additional monetary easing measures without hesitation if necessary,” Kuroda also said.
The branch managers’ meeting, designed to review economic conditions in the country’s nine regions, was held in videoconference format for the first time to prevent the spread of the new coronavirus. A quarterly report summing up the discussions will be released in the afternoon.
In the BOJ’s “tankan” quarterly business sentiment survey for March, released on April 1, the diffusion index for large manufactures’ current business conditions plunged to minus 8, showing the first negative reading in seven years.
Small companies’ DI fell by 8 points from the previous December survey. The drop was the largest since the June 2011 survey after the massive earthquake, tsunami and nuclear accident in March that year.
In its January regional economic report, the central bank downgraded its assessments for three regions, citing the impact of U.S.-China trade tensions.
After the release of the report, the new coronavirus started raging, and the Japanese government declared a state of emergency on Tuesday for Tokyo and other six prefectures.
Deterioration of the economy is likely to rear its ugly head in more regions.