Masayoshi Amamiya: Japan's economy and monetary policy

Speech by Mr Masayoshi Amamiya, Deputy Governor of the Bank of Japan, at the Japan National Press Club, Tokyo, 29 July 2020.

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

Introduction

It is my pleasure to have the opportunity to talk at the Japan National Press Club. Today, I would like to talk about the Bank of Japan's view on economic and financial developments at home and abroad, and about its thinking on the monetary policy conduct since March in response to the impact of the novel coronavirus (COVID-19). I have to say that there are still extremely high uncertainties over future developments regarding COVID-19 and their impact on economic activity. It is necessary to make monetary policy responses flexibly, depending on how the situation turns out. Therefore, in my speech, I would like to place particular focus on outlining the impact of the spread of COVID-19 on economic activity and prices, as well as the Bank's thinking on the monetary policy conduct.

I. Economic and Financial Developments at Home and Abroad Affected by COVID-19

Features of Economic Developments Affected by Infectious Diseases

Global economies, including Japan's, have been subject to pandemics on several occasions. During pandemics, changes in economic developments are unique and differ from a typical business cycle. Let me begin by outlining the features of economic developments at different phases of pandemics.