Junko Koeda: Economic activity, prices, and monetary policy in Japan
Speech by Mr Junko Koeda, Member of the Policy Board of the Bank of Japan, at a meeting with local leaders, Niigata, 20 November 2025.
The views expressed in this speech are those of the speaker and not the view of the BIS.
I. Current Situation and Outlook for Economic Activity and Prices
There is now just over a month left in the year. Looking back on this year, the kanji character for "rice" -- also used in the Japanese word for "United States" -- often caught my attention in news coverage. First of all, extremely high uncertainties emerged over U.S. trade policy this spring. If trade policy, among other factors, exerts downward pressure on overseas economies, Japan's external demand will likewise be undermined. If the profits of exporting firms and their fixed investment decline, this could also exert downward pressure on the economy. Meanwhile, the price of rice, a staple food in Japan, began to surge in the second half of last year. Amid high inflation against the background of increases in the price of various food items, the attention given to rice prices may have had an impact on consumers' perceived inflation.
Today, I would like to talk about the current situation and outlook for economic activity and prices, keeping in mind the impact of U.S. trade policy and rice prices, and the magnitude of the impact.