Hitoshi Suzuki: Economic activity, prices, and monetary policy in Japan

Speech by Mr Hitoshi Suzuki, Member of the Policy Board of the Bank of Japan, at a meeting with business leaders, Ibaraki, 28 February 2019.

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

I. Recent Economic and Price Developments

A. Developments in Overseas Economies

I would like to begin my speech by talking about overseas economies.

Overseas economies have continued to grow firmly overall, although the business sentiment of manufacturing firms has been mixed across economies and regions recently. In terms of the outlook, overseas economies are expected to continue growing firmly on the whole, amid firm domestic demand, although various developments of late warrant attention, such as the U.S.-China trade friction.

The U.S. economy has continued to grow firmly, supported in part by a favorable employment and income situation. It is likely to maintain its expansion, underpinned by expansionary fiscal measures.

As for the European economy, growth in production has been decelerating, due in particular to the tightening of gas emission regulations on automobiles, and the economic growth rate also has been on a downtrend recently. The economy has continued on a recovery trend, albeit at a slower pace, as seen in exports having shown signs of a pick-up and business fixed investment having been on an increasing trend; however, attention needs to be paid to the outlook for the economy.