TOKYO (Reuters) – Bank of Japan policymakers warned of uncertainties over the country’s economic recovery as pandemic curbs hurt service consumption, a summary of their opinions voiced at an April policy meeting showed on Tuesday.
At last month’s rate review, the central bank kept monetary policy steady and projected that the world’s third-largest economy would recover from the COVID-19 pandemic’s damage.
But many in the nine-member board highlighted risks clouding the outlook and stressed the need to focus on supporting the economy with massive stimulus, according to the summary.
“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 member said.
The April 26-27 meeting came a day after the roll-out of a third state of emergency to combat the pandemic, curbs that lasted through Japan’s holiday-studded 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” in debating whether to extend a September deadline for the BOJ’s pandemic-relief programme, one member was quoted as saying.
“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 opinion showed.
In a sign climate risks were emerging as among key topics of debate, one board member said the BOJ must consider taking steps on climate change “in line with its mandate as a central bank,” according to the summary.
The BOJ releases a summary of opinions roughly a week after its policy meeting. It does not disclose the identity of the member who voiced the opinions.
(Reporting by Leika Kihara; Editing by Chang-Ran Kim and Gerry Doyle)