The downgrade would be attributed to the spike in omicron infections as the latest wave seemed to have dealt a bigger-than-expected blow to consumption activity. The central bank is said to also perhaps warn of heightening economic risks linked to the Russia-Ukraine war, which has led to energy prices soaring.

As such, the sources say that the BOJ will consider offering a bleaker view on the economy and consumption as compared to the previous assessment in January i.e. the economy "showing clearer signs of a pick-up".