TOKYO (Reuters). During this month’s policy meeting the Bank of Japan might downgrade its assessment of output from factories, according to sources. The Bank of Japan is concerned about supply disruptions resulting in China’s COVID-19 lockdowns taking a serious toll on Japan’s economy.

They said that the central bank could also be warning of increasing risks to global economic and exports as China’s slowdown, and Russia’s incursion in Ukraine, cloud their outlook.

The central bank will likely continue to believe that the third largest economy in the world is “picking up” as a trend, as the expected rebound in consumer spending offsets the decline in production. Three sources with knowledge of its thinking said it is unlikely.

According to a source, “While there may be temporary weakness in the economy between April-June and now, it’s still on the right track for recovery,” the source stated.

The BOJ has stated that exports and output “continued to increase” in its April latest assessment.

The Tuesday data revealed that the factory output dropped 1.3% in April as a result of China’s COVID-19 lockdowns, and other supply disruptions.