Bank of Japan policymakers (BOJ) has warned that an increase in coronavirus pandemics could slow economic recovery and cause instability in the banking system, affecting more companies.
Based on the minutes of the meeting published at the beginning of the opening of the Asian session, the monetary policy committee reportedly agreed to increase the stimulus if necessary.
However, the profits of financial institutions affected by the pandemic could hinder the central bank's ability to increase lending.
Several BOJ policymakers have warned that Japan should always be on the lookout for possible Covid-19 upgrades in the country after witnessing a rapid surge in infections around the world.
If the number of infections increases again, the country's economic recovery will be stunted. In fact, the long-term effects of pandemics can lead to job losses, affecting income and dropping consumption.
Although the BOJ maintained its monetary policy approach at a recent policy meeting, the central bank also showed a lack of confidence in policymakers over their modest economic recovery projections.
In addition, they also emphasized that the BOJ should continue to focus on easing financing pressures and striving to achieve inflation targets after the pandemic was successfully curbed.
At the September session policy meeting, the BOJ agreed to keep interest rates at -0.10% and the 10-year bond yield target at 0%.
