This was based on my view that it is necessary not only to support financing and provide liquidity but also to implement measures to achieve the 2 percent price stability target at the earliest possible time and thereby support Japan’s economy in returning to a powerful growth path.
The spread of COVID-19 will lead to a tightening of public health measures and worsening of households’ and firms’ sentiment, and thereby dampen private consumption and firms’ fixed investment. This in turn will exert downward pressure on prices through deterioration in the output gap toward excess supply.