BoJ Executive Director Director Eiji Maeda said Japan’s economy have suffered a “big contraction” in Q4 due to sales tax hike and sluggish global demand. But he maintained that the “economy is expected to continue expanding moderately as a trend, thanks to robust capital expenditure and government spending. He also warned that “we need to be vigilant against various risks such as the impact the coronavirus outbreak could have on output and spending by inbound tourists”.
The government announced today to spend JPY 10.3B from budget reserves to ease the impact from China’s coronavirus. Finance Minister Taro Aso said the government was ready to take additional steps depending on how big the impact from the outbreak could be. Economy Minister Yasutoshi Nishimura also said the economy was expected to pick up but the coronavirus outbreak could pose a risk to growth.