Haruhiko Kuroda: Response to COVID-19 and medium- to long-term challenges for Japan's economy - with an eye on the post-COVID-19 era

Speech by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the meeting of Councillors of Nippon Keidanren (Japan Business Federation), Tokyo, 24 December 2020.

Introduction

It is a great honor to have this opportunity to address such a distinguished gathering of business leaders in Japan today.

For eight years now, I have delivered a speech at this end-of-year meeting, and I can say that this year we have experienced enormous changes in the social and economic environment due to the shock of the novel coronavirus (COVID-19). As we wrap up 2020, I would first like to take a look back at economic developments this year, mainly focusing on the impact of COVID-19, and talk about the outlook for economic activity and prices. Then, I will explain the Bank of Japan's thinking behind its policy responses. In relation to the conduct of monetary policy, I will also touch on the conduct of the assessment for further effective and sustainable monetary easing, which the Bank decided at the Monetary Policy Meeting (MPM) held last week. Lastly, I would like to talk about what is necessary in taking advantage of lessons to be learned from overcoming the current crisis for future growth - that is, challenges regarding Japan's economy as a whole that should be addressed when also looking ahead to the post-COVID-19 era from a medium- to long-term perspective.

I. Economic and Price Developments during the COVID-19 Era and Their Outlook

Impact of COVID-19 on the Economy

Let me start with a look back at economic developments this year, mainly focusing on the impact of COVID-19.