MNI BRIEF: BOJ Concerned About Weak Pent-Up Demand Potential

The Bank of Japan is concerned that people fully vaccinated against Covid-19, mainly the elderly, are not venturing out during the state of emergency as the public health measures impede activity and further depress pent-up demand in the economy, MNI understands.

A state of emergency to stem the spread of Covid-19 is in place in 21 of the country's 47 prefectures, which accounts for about 76% of the population. It is set to expire at the weekend. But the government is considering extending the state of emergency, likely leading to a delay in economic recovery, see: MNI INSIGHT: BOJ Turns Focus To Q4 For Economic Rebound Signs.

In other countries, bank officials note fully vaccinated elderly are driving fresh consumer demand, but not in Japan and expect that to continue unless the government lifts or eases social distancing and other public health measures.

The government has considered measures to encourage vaccinated people to travel, dine out or attend large-scale events, including online Covid-19 vaccination certificates starting in December.