TOKYO (Kyodo) – The Governor of the Bank of Japan, Haruhiko Kuroda, said on Thursday that the coronavirus epidemic has had a “serious impact” on the Japanese economy and that the global economic outlook remains unclear.
“The BOJ will take further easing measures without hesitation if necessary,” while closely monitoring the spread of the virus, said Kuroda during a teleconference with the managers of the bank’s regional branches.
The virtual meeting took place against a backdrop of rising infections in major urban areas. Prime Minister Shinzo Abe declared a state of emergency for Tokyo, Osaka and five other prefectures on Tuesday to limit the spread of the virus.
Kuroda said the coronavirus has weighed on the country’s economy as exports, production and spending have declined, as has the number of incoming tourists to Japan.
“The uncertainty about the economic outlook is very high because it is not known when the global infection with coronaviruses will end,” he added.
The BOJ decided last month to expand its asset purchase program to stabilize the financial markets by increasing the purchase of exchange-traded funds at an annual rate of 12 trillion yen (110 billion yen dollars) against 6 trillion yen.
“Our country’s financial system has maintained overall stability, but corporate funding has worsened,” Kuroda said on Thursday’s teleconference, adding that global financial markets continued to show signs of “nervousness” despite the aggressive measures taken by the main central banks. .
“The BOJ is committed to ensuring liquidity for corporate financing and the stability of the financial markets by introducing new types of market transactions and increasing purchases of commercial paper and corporate bonds,” said Kuroda at the meeting.
The central bank released its Tankan quarterly survey last week, showing that the business climate for large manufacturers fell into negative territory in March for the first time in seven years.
The key index, measuring the confidence of companies such as auto and electronics manufacturers, fell to minus 8 from zero in December, the lowest level since March 2013. The index for large non-manufacturers, including including the service sector, increased from 8 to 20.
The central bank is expected to release its Sakura quarterly report on regional economies in Japan later Thursday.