TOKYO – The Bank of Japan (BOJ) downgraded its forecast for the bulk of the country's regional economies on Monday, citing concerns about the situation in Ukraine amid rising commodities costs and Covid-19-related weakness.

BOJ Governor Haruhiko Kuroda told a meeting of the bank's branch managers that greater inflation could be caused by rising energy and raw material costs, and that the core consumer price index excluding volatile fresh food items is anticipated to "obviously" rise, as per reports.

Kuroda also stated that there are "very high uncertainty" about how the crisis in Ukraine will effect commodity prices and the Japanese economy as a whole. "The impact of events in Ukraine on Japan's economy and pricing is extremely unpredictable," he said.

The BOJ's latest evaluation of its regional economies, as indicated in its quarterly "Sakura Report," was worse than it was in January for eight of the country's nine regions, with the virus's negative economic impact continuing to take a toll.

"Japan's economy has been improving as a trend," Kuroda noted, "but some deterioration has been evident in part, primarily owing to the impact of Covid-19." "A rise in foreign demand, accommodative monetary policy, and the government's economic stimulus would likely help the Japanese economy rebound despite being impacted by rising commodity prices," the BOJ chairman said.

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