Haruhiko Kuroda: Outlook for economic activity and prices and monetary policy

Speech (via webcast) by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at a meeting held by the Naigai Josei Chosa Kai, 19 May 2021.

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 address you today at the Naigai Josei Chosa Kai.

When I made a speech at this meeting a year ago, the global economy was significantly affected by the novel coronavirus (COVID-19) and was in the midst of deterioration that was more severe than at the time of the Global Financial Crisis (GFC). Since governments and central banks around the world have responded swiftly and at a large scale to this economic shock, the global economy fortunately hit bottom and has picked up since the second half of 2020. In the meantime, positive developments have been seen, such as vaccinations starting globally. However, COVID-19 continues to have an impact on the global economy.

In this situation, at the Monetary Policy Meeting (MPM) held at the end of April, the Bank of Japan updated its projections for Japan's economic activity and prices through fiscal 2023 and released them in the April 2021 Outlook for Economic Activity and Prices (Outlook Report). In addition, at the preceding MPM in March, based on the projection that economic activity and prices will remain under downward pressure for a prolonged period due to the impact of COVID-19, the Bank conducted the Assessment for Further Effective and Sustainable Monetary Easing, with a view to supporting the economy and thereby achieving the price stability target of 2 percent. Given the findings of the assessment, it decided on policy actions at that MPM.