Bank of Japan expects severe consequences of coronavirus outbreak

US, WASHINGTON (ORDO NEWS) — A coronavirus pandemic could plunge Japan into deep economic stagnation, central bank officials warned at an emergency meeting last week, while one of them saw space for additional incentives, a meeting summary released Wednesday showed.

The regulator last week softened policy even more by increasing the purchase of exchange-traded investment funds and other risky assets to combat the expanding economic consequences of the epidemic.

The summary of the discussion indicated that officials were deeply concerned about the enormous damage that could be done to the economy, which had barely recovered from last year’s sales tax increase, the ongoing outbreak of the virus.

“The Japanese economy can continue to stagnate even after the economies of other countries recover, as the consequences of the virus can be enormous,” said one member of the board of governors, according to the document.

“I doubt that the Japanese economy will show a sharp recovery after the virus is taken under control,” the opinion of another official is quoted.

A senior executive said the Bank of Japan could continue to respond flexibly to risks through measures such as a regular emergency meeting or an increase in asset purchases amid growing fears of a recession.

The next meeting of the Central Bank is scheduled for April 27-28.

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