Haruhiko Kuroda: Japan's economy and monetary policy

Speech by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the Kisaragi-kai Meeting, Tokyo, 10 May 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

It is my great pleasure to have the opportunity today to speak at the Kisaragi-kai meeting.

Five years have passed since the Bank introduced quantitative and qualitative monetary easing (QQE) in April 2013, and Japan's economy - which had been deteriorating under prolonged deflation - has improved significantly. Recently, corporate profits have been at record high levels, and the labor market is close to full employment. Although the price stability target of 2 percent has not been achieved yet, Japan's economy is at least no longer in deflation, which is generally defined as a sustained decline in prices, after having overcome negative shocks such as the large drop in crude oil prices. Over the past year, the year-on-year rate of change in the consumer price index (CPI) has increased moderately, registering around 1 percent of late. Today, I will first explain in detail the current situation of economic activity in Japan and its outlook, while outlining the Outlook for Economic Activity and Prices (Outlook Report) released after the Monetary Policy Meeting (MPM) held at the end of April. Then, I would like to talk about the Bank's thinking behind the conduct of monetary policy.