Bank of Japan to heighten stimulus as virus concerns affect forecast

MATSUYAMA, Japan- The Bank of Japan (BOJ) is ready to implement and increase stimulus proving that the economy’s recuperation is derailed, Deputy Governor Masazumi Wakatabe disclosed on Wednesday, saying that the novel coronavirus contagion could drastically affect corporate sentiment and international trade.

Wakatabe said that Japanese economy recuperated from slowdown last year aided by strong domestic demand and easing China-U.S. trade dispute, indicating that no urgent monetary retreat would occur. But risks are still in full blast as 2019’s sales tax hike inflicted household income and ambiguity of global outlook heavily affected business and corporate sentiment.

“There have been heightening uncertainties regarding the impact of the spread of the coronavirus on the global economy,” Wakatabe said.

“The BOJ…won’t hesitate to take additional easing steps if there is a greater possibility that the momentum toward achieving its 2% price target will be lost,” he added.

The Bank of Japan anticipates that the economy will climb this year and drive inflation to reaching its 2% mark.

Japan’s economy which sits as the third largest economy in the world, encountered worst contraction from 2019’s final quarter as domestic tax increase in October and gradual global demand directly affected consumption and exports.