Makoto Sakurai: Economic activity, prices, and monetary policy in Japan

Speech by Mr Makoto Sakurai, Member of the Policy Board of the Bank of Japan, at a meeting with business leaders, Akita, 11 October 2018.

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

A. Overseas Economies

Let me start with developments in overseas economies.

The world trade volume, which had been sluggish, started to increase from the second half of 2016 and has seen an acceleration in the pace since the second half of 2017. The increase stimulated domestic demand worldwide, and such synergy effects led to advanced and emerging economies continuing their high growth in a well-balanced manner.

Looking at developments in detail, the U.S. economy has continued to expand. Both private consumption and business fixed investment have been increasing on the back of a historically low unemployment rate level and favorable corporate profits. The economy consequently has continued to mark relatively high growth, supported partly by expansionary fiscal measures. The European economy has continued to recover, although its growth pace has decelerated somewhat recently.