Even as Japan has stressed that the Olympics will proceed as planned, government and central bank officials are more seriously weighing the risk of cancellation when making projections for this year's economic outlook, sources said.
The Bank of Japan is expected to loosen monetary policy next week to ease the hit to business sentiment from the coronavirus outbreak and the subsequent market volatility.
Such a move would still be based on an assumption that the economy will make a quick V-shaped recovery, fueled in part by a boost in demand from the Olympics in July.