By Leika Kihara

TOKYO (Reuters) – The Bank of Japan would continue to focus on cushioning the economic blow from the coronavirus pandemic, given lingering uncertainty over the outlook and subdued inflation, Governor Haruhiko Kuroda said on Monday.

Kuroda indicated that the slowing domestic demand, as well as companies’ unwillingness to pay more for raw materials to consumers, will keep inflation from rising too much.

He said that output and export growth would also slow down in the short term due to the Southeast Asian factory shut-downs, which were blamed for the Japanese pandemic.

Kuroda spoke at an Osaka meeting for business leaders. Kuroda acknowledged that Japan’s economic recovery has been slowed by successive COVID-19 waves.

However, he stated that supply disruptions were likely temporary and Japan’s economy would recover as soon as the effect of the pandemic subdues.

According to yield curve control, BOJ promises to keep the short-term interest rate at -0.1% while the 10-year yields will be around 0% through aggressive money print.

A range of programs were also extended to help companies affected by this pandemic, and they will continue until March 2013.

Kuroda noted that while corporate funding conditions may have improved compared to a while back, they are still very difficult for companies offering face-to–face services.

Kuroda stated that the BOJ needs to continue to address the Pandemic because of high levels of uncertainty due to spread from the Delta variant.