This photo shows the Bank of Japan headquarters building in Tokyo. (Mainichi)

       TOKYO (Kyodo) -- The Japanese economy remains in a "severe" situation amid the coronavirus pandemic, and the surging number of COVID-19 cases is causing a delay in the emergence of pent-up demand, a Bank of Japan board member said Wednesday.

       Toyoaki Nakamura, who sits on the BOJ's Policy Board, said the Japanese economy is picking up as a trend but cautioned against downside risks due to the spread of the highly contagious Delta variant during a virtual meeting with local business leaders in Miyazaki Prefecture, southwestern Japan.

       "Due to the resurgence of infections, the timing for pent-up demand (to emerge) is likely to have been slightly delayed," Nakamura told the meeting. "Thereafter, it is possible that we will see economic activity picking up more than anticipated."

       He touched on the importance of further progress in COVID-19 vaccinations and strengthening the medical system in mitigating the economic impact of the pandemic.

       Japan's economy eked out growth in the April-June quarter, buoyed by strong exports and corporate spending, but private consumption, a main component of domestic demand, remained weak. Economists expect personal spending, which has been suppressed by the pandemic, to increase once the infection situation stabilizes.

       Japan is struggling to stem the recent surge in COVID-19 cases, with the government set to expand a state of emergency to a wider area of the nation just a day after the Paralympics got under way Tuesday.

       The pandemic has moved the BOJ's goal of achieving 2 percent inflation further away, with the most recent data showing core consumer prices, excluding volatile fresh food items, dipped 0.2 percent in July.

       Nakamura said Japan is unlikely to see price-cutting by companies to spur demand. Rather, firms need to improve their profitability by raising prices as raw material costs have been surging.

       The reopening of overseas economies following the initial impact of the pandemic has helped Japanese manufacturers stage a recovery in sales through increased exports. But nonmanufacturers, especially providers of face-to-face services, are still struggling.

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