Asahi Noguchi: Transformation of the global economy and developments in monetary policy

Speech by Mr Asahi Noguchi, Member of the Policy Board of the Bank of Japan, at a meeting held by the Sapporo Chamber of Commerce and Industry, Sapporo, 29 September 2025.

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 speak at this meeting. In my speech today, I would like to offer my overview of how the focus of monetary policy of central banks, including the Bank of Japan, has changed to date in light of the global economic environment, which has undergone a major transformation in the wake of the Global Financial Crisis (GFC) and the COVID-19 pandemic. Since April 2021, I have been involved in monetary policy conduct as a Policy Board member of the Bank. Before that, as an academic researcher, I was engaged in analyzing monetary policy and other macroeconomic policy measures. Today, I will talk about developments in monetary policy from the past and into the future by trying to get back to a scholarly, somewhat holistic point of view.

Triggered mainly by the GFC from 2008 and the COVID-19 pandemic from 2020, the monetary policy of major central banks shifted dramatically from conventional policy, in which the central bank guides the interest rate as a policy tool, to unconventional policy, such as quantitative easing (QE). To come right to the point, the changes brought about by this policy shift to a considerable extent have been irreversible. Although many major central banks have returned from unconventional policy to conventional policy, their policy framework is very different from what it looked like before the GFC. That is, these central banks are now conducting monetary policy in the context of reserve balances that are significantly larger than before the GFC.