BOJ may extend pandemic-aid schemes to support fragile recovery By Reuters –

© Reuters. FILE PHOTO: A man wearing a protective mask stands in front of the headquarters of Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 22, 2020.REUTERS/Kim Kyung-Hoon/File Photo

By Leika Kihara

TOKYO (Reuters) – The Bank of Japan is set to keep its money spigots wide open and may extend its pandemic-relief programmes next week to support a fragile economic recovery, reinforcing expectations it will lag major counterparts in dialing back crisis-mode policies.

While extended state of emergency curbs to combat the coronavirus are weighing on consumption, BOJ policymakers have become cautiously optimistic on the outlook as exports remain solid, sources familiar with its thinking say.

An emerging new worry among policymakers is a spike in prices of raw materials ranging from oil to lumber to metals that pushed wholesale inflation to a 13-year high in May, pinching profits for companies still reeling from the pandemic’s hit.

But Japan has not seen the kind of inflationary pressure building more...