Seiji Adachi: Economic activity, prices, and monetary policy in Japan

Speech (via webcast) by Mr Seiji Adachi, Member of the Policy Board of the Bank of Japan, at a meeting with local leaders, Shizuoka, 2 June 2021.

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

I. Recent Developments in Economic Activity at Home and Abroad

A. Developments regarding the Novel Coronavirus (COVID-19)

I would like to begin my speech by talking about developments regarding COVID-19.

The outbreak of COVID-19 was first identified in China in January 2020, spreading to Europe from late February, and ultimately worldwide. The number of confirmed new cases continued to increase with large fluctuations across countries and regions. Since the beginning of 2021, however, developments in such figures appear to have become somewhat polarized. That is, in countries where vaccinations are steadily progressing, such as the United States, the United Kingdom, and Israel, the number of cases peaked out and has turned toward a downtrend; on the other hand, in emerging economies, which are falling behind in vaccinations, the number of cases has remained at a high level, partly affected by new variants (Chart 1).

In Japan, as the number of cases has been increasing again since early spring 2021, mainly in major metropolitan areas, the government declared a state of emergency for the third time.

B. Overseas Economies

With a view to suppressing the spread of COVID-19, many countries implemented measures to constrain economic activity around spring 2020 by imposing restrictions on going outside and on people's movement. Therefore, the real GDP growth rates worldwide registered substantial declines for the April-June quarter that year.