Haruhiko Kuroda: Further effective and sustainable monetary easing

Speech (via webcast) by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the Kisaragi-kai Meeting, Tokyo, 30 March 2021.

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

Introduction

It is my great pleasure to have the opportunity today to speak at the Kisaragi-kai meeting. The global economy has been hit by the extremely large shock of the novel coronavirus (COVID-19) over the past year. In the first half of last year, it became depressed more significantly than at the time of the Global Financial Crisis. Fortunately, owing to swift and aggressive responses made by the governments and central banks around the world, it has picked up from the bottom. Japan's economy has shown similar developments to those of the global economy.

That said, COVID-19 has continued to affect economic activity considerably. Due to its impact, Japan's economic activity and prices are projected to remain under downward pressure for a prolonged period. The Bank considers it crucial to support the economy under these circumstances and thereby achieve the price stability target of 2 percent. In doing so, it is important first of all to address the impact of COVID-19, and since March 2020, the Bank therefore has been conducting powerful monetary easing to support financing, mainly of firms, and ensure stability in financial markets. In addition, from a somewhat long-term perspective, the Bank's challenge is to conduct further effective and sustainable monetary easing, with a view to achieving the price stability target of 2 percent. To this end, the Bank conducted an assessment at the latest Monetary Policy Meeting (MPM) and took policy actions based on the findings. Today, I will first talk about developments in Japan's economic activity and prices as well as the Bank's responses to the impact of COVID-19. Then, I will elaborate on the policy actions that have been decided based on the findings of the latest assessment.