Shinichi Uchida: Japan's economy and monetary policy

Speech by Mr Shinichi Uchida, Deputy Governor of the Bank of Japan, at a meeting with local leaders, Chiba, 2 August 2023. 

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

Central bank speech  | 
03 August 2023


It is my pleasure to have the opportunity today to exchange views with leaders in administrative, economic, and financial areas in Chiba Prefecture. I would like to take this chance to express my sincere gratitude for your cooperation with the activities of the Bank of Japan.

Today, I will explain Japan's economic activity and prices, as well as the Bank's conduct of monetary policy.

I. Current Situation of and Outlook for Economic Activity

I will start by talking about Japan's economic developments. Japan's economy has recovered moderately. Economic activity in both the household and corporate sectors has improved steadily, as pent-up demand, i.e., demand that had been suppressed during the pandemic, has materialized. Japan's economy is likely to continue recovering moderately, supported for the time being by pent-up demand and subsequently by increases in wages and corporate profits. In the Bank's Outlook for Economic Activity and Prices (Outlook Report) released last week, it is projected that the economic growth rates will be in the range of 1.0-1.5 percent for fiscal 2023 and 2024 and around 1 percent for fiscal 2025 (Chart 1).

In what follows, I will explain developments in the household and corporate sectors. First, regarding the household sector, private consumption has increased steadily at a moderate pace, mainly for services such as accommodations as well as eating and drinking, as pent-up demand has materialized due in part to the reclassification of COVID-19 under the Infectious Disease Control Law (Chart 2). Recovery in inbound tourism demand has also been a tailwind for the face-to-face services industry.