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

Speech (via webcast) by Mr Hitoshi Suzuki, Member of the Policy Board of the Bank of Japan, at a meeting with business leaders, Fukushima, 3 December 2020.

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 picked up from a state of significant depression. Specifically, the growth rates for the April-June quarter of 2020 were substantially negative in many economies that implemented measures such as lockdowns in response to the spread of the novel coronavirus (COVID-19), mainly in Europe and the United States. However, the growth rates of these economies for the July-September quarter turned significantly positive, partly reflecting the materialization of pent-up demand and the effects of a recovery in production from the decline brought about by COVID-19, amid a resumption of economic activity. As for the outlook, overseas economies are likely to continue improving, partly supported by aggressive macroeconomic policies taken by each country and region, with the impact of COVID-19 waning gradually. However, the pace of improvement is expected to be only moderate. This is because many countries and regions are projected to experience negative growth for 2020, given that Europe and the United States are currently facing a serious resurgence of infectious cases, and also because firms and households are likely to remain vigilant against the risk of infection until effective medicines and vaccines are developed and widely distributed (Chart 1).

B. Recent Developments in Japan's Economy

Based on the aforementioned developments in overseas economies, let me now move on to economic activity and prices in Japan.