BOJ Foresees Uncertainties in Economic Recovery

Bank of Japan policymakers have warned of uncertainties over the country's economic recovery as the pandemic continues to hurt consumption - the April policy meeting showed on Tuesday.

At last month's rate review, the central bank kept monetary policy steady and forecasted that the economy would recover from COVID-19 damage, but some members have paid close attention to the risks and stressed the importance and largeness of government stimulus required to get the economy out of the pandemic-caused slump.

"Japan's economy is recovering thanks to robust external demand. But we need to remain vigilant to downside risks from a resurgence in infections, given uncertainty over the pace of vaccine rollouts and their effect”, one of the members commented.

The  meeting came a day after the roll-out of a third state of emergency to combat the pandemic, curbs that lasted through Japan's Golden Week and were extended until the end of May.

As the pandemic persists, Japan has seen a divergence between manufacturers benefiting from robust global demand and retailers struggling from the curbs on social activity.

"Such changes in corporate financing environment must be taken into account. Face-to-face services in particular have faced pressure mainly from the third state of emergency...The BOJ must focus on addressing the impact of COVID-19”, another member said. 

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