The risks to our upbeat vaccine assumptions

While Japan’s vaccine rollout won’t begin until late February, we are assuming that inoculations proceed rapidly enough for most of the vulnerable to be protected by the middle of the year with the result that the economy returns to pre-virus levels in Q3 2021. However, disruptions to the supply and distribution of vaccines, plus potentially weak uptake, present downside risks. There is also a worst-case scenario, whereby new variants of the virus resistant to available vaccines spread widely, potentially translating into the economy not receiving a “vaccine bounce” at all this year.