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TOKYO (MNI) - The coronavirus outbreak could have a damaging impact on the
economy and the Bank of Japan will not hesitate to take necessary policy action
if needed, Governor Haruhiko Kuroda said Friday.
"It is difficult to strictly gauge the impact of the coronavirus on
(Japan's) economy. But we continue to carefully examine the impact and (the
bank) will take necessary policy when it is necessary," Kuroda told lawmakers,
although he didn't elaborate on how and when the bank would consider taking
policy additional easy policy.
"Production and spending will be restricted in China due to the
coronavirus. It is high possibility that (weaker Chinese economy) will put
downward pressure on the global economy through trade," he added.
China's position in the global economy is greater than when SARS hit in
2003 and there is high possibility that the slower Chinese economy will have
"If the coronavirus is prolonged, its impact on the global economy would
become larger," Kuroda said.
As for the impact of the virus on Japan's economy, Kuroda cited three
routes: the drop in Japan's exports to China; disrupted supply chains in China;
a fall in Chinese tourists visiting Japan.
He also said that the BOJ continues to carefully eye downside risks and
their effect on production, exports and spending.
He added that the coronavirus will be the main topic at this weekend's G20
meeting of central bankers and financial ministers in Riyadh, Saudi Arabia.
However, Kuroda maintained his overall view, saying that downward pressure
on Japan's economy will likely ease, with a continued moderate recovery based on
capital investment and government stimulus measures.
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