In the Summary of Opinions of BoJ’s April 26-27 meeting, board members noted that risks to economic activity are “skewed to the downside” due to the impact of COVID-19, including the “current spread of variants” and “recent reinstatement of state of emergency”. Also uncertainties remain high, such as “progress with vaccinations”.
One member warned, “if vaccinations do not proceed smoothly in Japan in contrast to the progress abroad, it is concerning that the country might be left behind even in terms of economic growth.”
One member also noted, “in order to bring Japan’s economy back onto a growth path early, it is important to have an acceleration in the pace of vaccinations while mitigating deterioration in consumer sentiment and volatile movements in financial markets.”
Another member also said, “reflecting differences in progress with vaccinations and policy responses, varied and uneven developments have been seen across regions and industries, which can be characterized as K-shaped recovery”. The member added, “there is some possibility that the recovery will stall and policy responses will be terminated prematurely. There also are political and geopolitical risks to a certain extent.