TOKYO, July 15 (Xinhua) -- The Bank of Japan (BOJ) on Wednesday forecast the economy here to contract 4.7 percent in fiscal 2020 through March 2021, while saying it expects the consumer price index to retreat 0.5 percent in the same period owing to the effects of the pandemic.
The forecasts came following the conclusion of the central bank's two-day policy setting meeting at which it decided to maintain its ultra-easy monetary policy to help underpin the recession-hit economy.
The bank's policy board members voted to keep its short-term interest rates at minus 0.1 percent, while guiding long-term rates at around zero percent. Its annual purchases of exchange-traded funds (ETFs) at up to 12 trillion yen (112.3 billion U.S. dollars), were also maintained.
The BOJ's corporate support measures amounting to 110 trillion yen (1.02 trillion U.S. dollars) and corporate bond and commercial paper purchases introduced last month, meanwhile, were also left unchanged.
The bank's assessment of the economy was upheld from the previous month, with BOJ Governor Haruhiko Kuroda telling a post-meeting press briefing that, "Japan's economy has been in an extremely severe situation."
"The country's economy will slowly but firmly recover in fiscal 2021 and later," Kuroda added.
According to the central bank's most recent quarterly economic and inflation outlook report, the world's third-largest economy is forecast to expand 3.3 percent in fiscal 2021.
The bank has also said it expects economic activity to slowly return to levels seen before the global coronavirus pandemic.
"To some extent, the BOJ has contributed to less bankruptcies and job cuts compared to other nations and situations in the global financial crisis," Kuroda said with reference to the bank's measures, in twine with the government's economic stimulus packages.
The BOJ chief said, however, that while some sectors such as factory output and consumption had shown solid signs of recovery, industries such as tourism would remain hamstrung as long as the virus continues.
"Production and spending on goods seem to have bottomed out in Japan, but service industries such as tourism are not likely to fully recover without the containment of the virus," Kuroda said.
In terms of future moves, the BOJ reiterated its long held stance that it stood poised to roll out additional easing measures if deemed necessary.
"The bank will closely monitor the impact of the novel coronavirus and will not hesitate to take additional measures if necessary," the BOJ said. Enditem
