The ongoing coronavirus pandemic is likely to heighten economic uncertainty in Japan, with both output and consumer consumption likely to be impacted severely in the coming months, according to BOJ governor Kuroda. In the wake of the higher risk of recession, Kuroda signalled that the central bank would be open to further easing to protect the economy.

Kuroda made these statements at a quarterly meeting with the BOJ’s regional branch managers, adding, “The spread of the coronavirus is having a severe impact on Japan’s economy through declines in exports, output, demand from overseas tourists and private consumption.”

He highlighted that corporate companies were likely to face difficulties in receiving funding even though governments and central banks around the world have rolled out numerous stimulus measures. While Kuroda didn’t mention any more easing measures, he let on that the BOJ could consider more stimulus depending on how the situation develops in the near future.

A recent Reuters poll has highlighted the likelihood of a deep recession in the Japanese economy this year, with the economy expected to contract into Q2 2020. Markets are widely expecting the BOJ to confirm that the economy could witness a contraction in 2020 as a result of the coronavirus pandemic.