TOKYO (Reuters) – The Bank of Japan may downgrade its economic assessment at next week’s policy meeting as a spike in Omicron COVID-19 infections dealt a bigger-than-expected blow to consumption, said four sources familiar with its thinking.
The central bank may also warn of heightening economic risks from the Ukraine crisis, which threatens to dent consumption and corporate profits through soaring energy costs, they said.
“After recovering late last year, consumption seem to have slumped as Omicron and coronavirus curbs kept people home,” said one of the sources, a view echoed by three more sources.
“The economy didn’t do well in the first quarter,” and may struggle to gain momentum due to the fallout from the war in Ukraine, a second source said.
At the two-day meeting ending on March 18, the BOJ will thus consider offering a bleaker view on the economy and consumption compared with its previous meeting in January, the sources said.
In January, the BOJ said the economy and consumption were “showing clearer signs of pick-up.”
(Reporting by Leika Kihara; Editing by Toby Chopra)
