Masayoshi Amamiya: Japan's economy and monetary policy

Speech (via webcast) by Mr Masayoshi Amamiya, Deputy Governor of the Bank of Japan, at a meeting with local leaders, Niigata, 21 July 2021.

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

Central bank speech  | 
21 July 2021


It is my pleasure to have the opportunity today to exchange views with leaders in administrative, financial, and economic areas in Niigata Prefecture, which is taking place online due to the continuing impact of the novel coronavirus (COVID-19). I would like to take this chance to express my sincere gratitude for your cooperation with the activities of the Bank of Japan's Niigata Branch.

At the outset of this meeting, I would like to explain the Bank's view on economic and financial developments while touching on the content of the July 2021 Outlook for Economic Activity and Prices (Outlook Report) released last week, and also talk about its thinking on the conduct of monetary policy. In addition, I will outline the Bank's comprehensive strategy on climate change that was made public last week, focusing on its monetary policy actions.

I. Developments in Economic Activity and Prices

Economic Developments

I will start by talking about economic developments. Downward pressure has continued to be exerted on Japan's economic activity - mainly in the face-to-face services sector, such as eating and drinking as well as accommodations - since the impact of COVID-19 has remained, as evidenced by the state of emergency now in place in Tokyo and Okinawa Prefecture. However, on the back of a clear recovery in overseas economies, exports and production have continued to increase. In the corporate sector, a virtuous cycle in which a recovery in profits leads to an increase in business fixed investment has started to operate. Thus, Japan's economy has picked up as a trend, although it has remained in a severe situation due to the impact of COVID-19. Before moving on to economic activity in the corporate and household sectors, let me explain developments in overseas economies.