TOKYO: Some Bank of Japan policymakers in mid-July expressed their concerns that Japanese economic recovery may be delayed by a resurgence of the novel coronavirus, the BOJ said July 27.
The BOJ Policy Board held the view that Japan’s economy was “in an extremely severe situation,” according to a summary of opinions expressed at the Policy Board’s meeting July 14-15.
“We cannot be optimistic about the timing of an economic recovery since it will be delayed further if COVID-19 spreads again,” one member said at the policy-setting meeting.
The domestic economy “turned to a recovery recently” after slumping due to the coronavirus crisis, but “the pace of recovery is expected to be only moderate,” according to an opinion included in the summary.
There was a pessimistic view that “even in fiscal 2022, the economy is unlikely to return to the level reached before the outbreak of COVID-19.”
BOJ policymakers praised the monetary stimulus measures taken since March. One opinion recognized “positive effects in terms of maintaining stability in financial markets and ensuring smooth corporate financing.”
Amid a tough business environment, a view was expressed that “the top priority for monetary policy for the time being is to contribute to sustaining businesses and employment by continuing to support corporate financing,” the summary showed.
It is important for the BOJ to “swiftly make policy responses when necessary,” one opinion said while calling for attention to “the risks to the financial system if the current policies are conducted for a prolonged period.”