BoJ's Kuroda watching coronavirus fallout with 'grave concern'

February 21, 2020 17:06
Bank of Japan is watching the economic impact of the coronavirus with grave concern and keeping a close eye on downside risks, Haruhiko Kuroda said on Friday. Photo: Bloomberg

Bank of Japan (BoJ) Governor Haruhiko Kuroda said on Friday that he is watching the coronavirus impact on the economy with “grave concern,” as the epidemic takes a toll on manufacturing activity and exports.

"Huge uncertainty remains on how the spread of the new virus may affect the Japanese economy,” Kuroda told the Japanese parliament, Reuters reports.

"We're watching the impact with grave concern and keeping a close eye on downside risks,” the central bank chief added.

The comments came as a private industry survey suggested that Japan’s factory activity contracted at the sharpest pace in seven years in February, heightening worries that the world’s third-largest economy is on the brink of recession.

The fallout from the coronavirus crisis will be a main topic of debate at a Group of 20 finance leaders’ meeting in Riyadh over the weekend, Kuroda said.

The BoJ chief reiterated the central bank's readiness to ease monetary policy further as needed. But he said it’s “not time yet” to discuss specific monetary policy steps.

Japanese Finance Minister Taro Aso told reporters on Friday that he will explain to his G20 counterparts that Tokyo is taking necessary steps to contain the spread of the epidemic, which has become “among risks to the global economy.”

Japan's economy shrank at its fastest pace in nearly six years in the December quarter, as soft global demand and last year’s sales tax hike hurt consumption and business spending.

Some analysts expect the economy to contract again in the current quarter.

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