Bank of Japan Gov. Haruhiko Kuroda said he is starting to see the light at the end of the dark pandemic tunnel thanks to the rollout of COVID-19 vaccines but warned of risks from an uneven economic recovery.
In his opening remarks at a conference hosted by the BOJ’s research institute on Monday, Kuroda said the pandemic has brought various changes to society and accelerated digitalization, which will likely boost productivity and benefit individuals and companies.
Still, Kuroda said it is necessary to pay attention to the possibility that the fruits of growth brought on by digitalization will be concentrated in a “small fraction of society.”
“We are beginning to see the light at the end of this pandemic tunnel, but the light does not clearly reveal the shape of the society and economy we are approaching,” Kuroda told the conference online.
The fragile and uneven nature of economic recovery has been a source of concern globally. Japan has seen a growing divergence between manufacturers and nonmanufacturers in the pace of recovery as the country still struggles to rein in infections with its vaccine rollout, which has lagged behind countries such as the United States.
Going forward, the challenges faced by central bankers will change from providing liquidity support to addressing issues such as solvency and corporate viability, according to Kuroda.
Kuroda said last week the central bank would consider extending its scheme to support corporate funding beyond the end of September depending on the impact of the COVID-19 crisis.
“At the same time, policymakers face the additional challenges of the economic inequality that has become even more apparent during this health crisis, and the response to increasing worldwide concerns over climate change,” he said.
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