Due to tremendous progress in vaccinating the population, Bank of Japan Governor Haruhiko Kuroda expressed optimism that the country's economy will overcome the impact of the coronavirus pandemic in the coming months.
"I'm confident the Japanese economy will overcome COVID-19's impact in the coming months, and will be in a recovery and growth phase within a few months," he said.
Kuroda made the remarks before presenting a prepared speech on green finance, stating that it is critical to offer funding to companies that will take a long time to shift to greener operations. "While responding to climate change is a top priority, achieving full decarbonization will take a long time," Kuroda said.
"It is critical to provide stable support for structural change in sectors and industries where decarbonization will be difficult to achieve in a short period of time in order to promote decarbonization of the economy as a whole," he said.
The BoJ will meet on December 16-17 for a rate review. It is expected to maintain present monetary policies and may elect to extend a set of pandemic-relief lending programmes beyond their current March 2022 expiry.
As a result of state-of-emergency restrictions to combat the virus, Japan has fallen behind other advanced nations in making a strong recovery from the pandemic's impact.
While the lifting of the restrictions on September 30 raised optimism for a rebound in consumption, supply bottlenecks and parts shortages disrupted manufacturing and weighed on the export-dependent economy.
Concerns about Japan's fragile recovery drove the government to announce a record $490 billion spending package earlier this month, bucking a global trend of withdrawing crisis-mode stimulus.