December 12, 2019
Bank of Japan
Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Okayama
Masayoshi Amamiya
Deputy Governor of the Bank of Japan
Introduction
It is my pleasure to have the opportunity today to exchange views with administrative,
financial, and business leaders in Okayama Prefecture. I would like to take this chance to
express my sincere gratitude for your cooperation with the activities of the Bank of Japan's
Okayama Branch.
Yesterday, I looked at the recovery of areas that were severely damaged by the heavy rain in
July 2018, such as Mabicho. It was heartbreaking to see that the impact of the disaster
remains even after a year and a half has passed. However, at the same time, it was very
encouraging to know that the locals are making steady progress toward recovery. I would
like to express my deepest respect for everyone's efforts.
Before exchanging views with you, I would like to talk about the Bank of Japan's view on
developments in economic activity and prices, including the global economy, and about the
underlying thinking on its monetary policy conduct. In particular, let me explain these by
focusing on three questions that I have received often recently: how long the global
economic slowdown will continue; whether it will affect domestic demand; and the degree
of the consumption tax hike's impact.
I. Financial and Economic Developments
I will start by talking about developments in the global economy. Let me first look back at
developments over the past few years (Chart 1). From 2017 through the global
mid-2018,
economy had been firm, supported mainly by global growth in demand, a
IT-related
resultant boost in business fixed investment, and steady domestic demand in each country.
Since around however, the global growth rate and world trade volume have
mid-2018,
declined, mainly reflecting heightening uncertainties over the trade friction and
U.S.-China
adjustments in the global cycle for goods that were affected by weak demand for
IT-related
data centers and smartphones. In particular, the world trade volume started to decrease from
the middle of this year. The characteristic of the current slowdown in the global economy is
that the manufacturing sector has been relatively weak against the background of the
slowdown in trade activity (Chart 2). Business sentiment in the manufacturing sector
globally has remained in a state of deterioration. In this situation, machinery investment has
remained somewhat weak. In addition, global automobile sales have been somewhat weak
due to various factors such as weak corporate demand, which also is observed in machinery
investment, the effects of stricter environmental regulations, and the tightening of financial
conditions in some emerging economies. There used to be a prevailing view that the global
economy would head toward a pick-up in 2019, but the pick-up turned out to be delayed,
and many institutions, including the International Monetary Fund (IMF) and the Bank of
Japan, had to revise downward their projections for global economic growth. The delay is
mainly attributable to the intensified and prolonged trade friction and a
U.S.-China
continuing decline in the growth rate of the Chinese economy.
So, how long will the global economic growth pace continue to be in this deceleration
phase? In other words, when will the global economy pick up? The Bank projects that,
although it is subject to considerable uncertainties, the growth rate will rise moderately
through According to the latest World Economic Outlook (WEO) released by the
mid-2020.
IMF, the global growth rate for 2019 is projected to decline to 3.0 percent and thereafter
recover to 3.4 percent for 2020, which is around the past average (Chart 1).
One of the mechanisms through which the global economy will pick up is the
materialization of the effects of each country's macroeconomic policy. Since the beginning
of this year, many emerging and economies have reduced their policy
commodity-exporting
rates. As for advanced economies, the Federal Reserve cut its policy rate at three
consecutive meetings held from July through October, with a view to
preventing an actual
due to risks concerning weak global growth, as
slowdown in economic activity and prices
well as trade developments. The European Central Bank (ECB) also conducted monetary
easing in September. These accommodative monetary policy measures will likely support a
in the global economy by stabilizing economic and price developments in each
pick-up
country. At the Federal Open Market Committee (FOMC) held this morning, the Federal
Reserve decided not to change its policy. As background to this decision, the Federal
Reserve has pointed to the projection that the "insurance" rate cuts in the past few months
will likely underpin the U.S. economy.
Another driving force of a in the global economy is a recovery in the global cycle
pick-up
for IT-related goods, which triggered the current global economic slowdown (Chart 3). The
global demand for semiconductors is bottoming out, and demand for smartphones and data
centers is likely to pick up. In addition, from a somewhat perspective, demand
longer-term
related to 5G network is expected to increase globally. In this situation, the phase of
inventory reductions has almost ended in Japan, and some increase in exports and
production of goods has started to be seen.
IT-related
Moreover, regarding the trade friction, which entails the largest uncertainties
U.S.-China
over the global economy, negotiations seem to be continuing toward further progress even
after the United States postponed imposing additional tariffs on Chinese goods in October.
Global financial markets have taken these developments as favorable, and investors' risk
sentiment has improved compared to a while ago. If a globally stable trade relationship is
rebuilt, that will boost again the global trade, which has shrunk.
Although signs of a in the global economy have started to be observed gradually,
pick-up
uncertainties over the outlook continue to warrant attention and the Bank is cautious about
future developments. The trade negotiations have shown positive developments,
U.S.-China
but points of disagreement between the two countries remain in various aspects, and I have
to say that uncertainties over the outcome of the negotiations are still high. In addition,
close attention should be paid to various risks, including developments in emerging
economies such as China, how the exit from the European Union (EU) will turn out in the
United Kingdom, where the general election is going to take place today, and geopolitical
risks. As for the outlook, if firms have to keep paying attention to risks concerning the
global economy for a prolonged period, it could take longer than expected for their fixed
investment stance to become active again. Thus, downside risks concerning the global
economy will continue to warrant close attention.
Thus far, I have talked about developments in the global economy. Now, I would like to
move on to Japan's economic developments. The growth pace in the global economy has
remained slow, and this has affected Japan's economy, mainly the manufacturing and
industries (Chart 4). Since the turn of the year, manufacturers' sentiment in
export-related
Japan has become clearly cautious. With regard to exports and production activity, some
weakness has continued to be observed, particularly in capital goods used for business fixed
investment and goods. As for the outlook, these developments are likely
automobile-related
to continue for the time being with the in the global economy being delayed.
pick-up
What is unique to the current phase is that, in contrast to somewhat weak external demand,
domestic demand has been firm (Chart 5). In the past, large economic fluctuations often
occurred in Japan, where the negative impact on the manufacturing sector stemming from
changes in the global economy spread to domestic demand. In the current phase, however,
although exports have continued to show some weakness, domestic demand has continued
to increase in all three sectors that is, the corporate, household, and public sectors. Thus,
--
the impact of the global economic slowdown on domestic demand has been limited so far.
The Bank expects that, with the virtuous cycle from income to spending operating, domestic
demand will follow an uptrend and the impact of the global economic slowdown on
domestic demand will remain limited. That is, although the momentum of domestic demand
is likely to decelerate temporarily in the short run, reflecting the effects of the global
economic slowdown and the consumption tax hike, it is expected that a large decline will be
avoided. In what follows, I will explain the outlook for business fixed investment, private
consumption, and public investment in further detail.
Let me start with business fixed investment. Business fixed investment in Japan has
continued on an increasing trend on the whole, although it has been somewhat weak
globally. This is attributable to an increase in sustained investment that is less susceptible to
economic developments (Chart 6). Such investment includes
short-term labor-saving
investment that reflects tight labor market conditions. While the labor market conditions
remain tight and labor shortage is expected to continue from the perspective,
long-term
demand for saving labor and improving efficiency has increased, mainly in the
nonmanufacturing sector that is labor intensive. Since Okayama Prefecture, for which the
active job ratio is ranked in the top three in Japan, faces extremely
openings-to-applicants
tight labor market conditions, you may recognize this situation clearly. In industries that
face labor shortage including retail, accommodations as well as eating and drinking
--
services, and construction firms are making efforts to save labor and improve efficiency
--
and actively are undertaking machinery and software investment. In addition, the uptrend in
research and development (R&D) investment for growth areas is expected to be maintained.
With a view to improving competitiveness from a perspective, the pace of
long-term
increase in R&D investment is planned to be maintained in industries such as automobiles
and chemicals, which recently have been affected by the global economic slowdown.
Moreover, construction investment also has maintained a high level, reflecting a wide range
of demand, such as for urban redevelopment projects, construction of distribution facilities
that results from the spread of and construction of accommodation facilities
e-commerce,
that aims at capturing inbound tourism demand. Although business fixed investment in
Japan as a whole has been on an uptrend, the effects of the global economic slowdown
actually have been seen in part (Chart 7). Let us take the example of machinery investment
in the manufacturing sector. In particular, machinery investment in industries related to
capital goods that are used for fixed investment and to automobiles has been somewhat
weak recently. While I mentioned earlier that exports and production in these industries had
been greatly affected by the global economic slowdown, the same thing can be said about
their business fixed investment. As for the outlook, business fixed investment is expected to
maintain its uptrend on average underpinned by sustained investment; in the short run,
however, its pace of increase is projected to decelerate, mainly for machinery investment in
the manufacturing sector, with the in the global economy being delayed.
pick-up
Next, I will talk about private consumption. Private consumption has increased moderately,
albeit with fluctuations that mainly result from the effects of the consumption tax hike, with
the employment and income situation continuing to improve steadily. Regarding
developments in private consumption for the time being, the key is the effects of the tax
hike in October, and this relates to the third question that I mentioned at the outset (Chart 8).
First, looking at developments in consumption prior to the tax hike, in September, which
was just before the tax hike, there was a significant increase in demand, or the
so-called
increase in demand, for household electrical appliances such as televisions,
front-loaded
daily necessities, and products including luxury goods. However, since the
high-end
increase in demand had not been significant through August, the overall
front-loaded
increase in demand was constrained this time compared with that of the previous tax hike,
when such increase was observed for quite a long period. Next, let us take a look at
developments after the tax hike. Attention needs to be paid to the fact that it is becoming
difficult to grasp the underlying trend in consumption due to downward pressure resulting
from the effects of natural disasters such as typhoons in October. In fact,
statistics since October have shown a somewhat large decline, and this
consumption-related
seems to be partly affected by the special factor that I just mentioned. Assessing
comprehensively by excluding this factor and by taking account of the perception of the
relevant industries, a reactionary decline in demand after the tax hike so far does not seem
to be as significant as that of the previous tax hike. In addition, downward pressure on
private consumption will highly likely be smaller than that of the previous tax hike,
underpinned by the government's various support measures for households. That said,
attention should continue to be paid to the effects of the tax hike, because they could change
depending on, for example, people's sentiment and price developments.
Lastly, let me move on to public investment. Last year, the heavy rain affected western
Japan, including Okayama Prefecture, and the earthquake in Hokkaido caused disastrous
damage. There also was great damage caused by a series of natural disasters this year, such
as several typhoons that hit mainly eastern Japan. In the affected areas, progress has been
made in construction projects related to restoration and reconstruction. In addition,
construction related to national resilience which aims at strengthening the ability to
--
maintain the functioning of infrastructure even when natural disasters occur is to be
--
implemented intensively across the country through fiscal 2020. In Okayama Prefecture, as
part of the urgent flood control project in Mabicho, construction is underway such as for
Oda River, which caused severe damage at the time of the heavy rain last year. Moreover,
economic policy measures decided by the government a while ago include initiatives to
promote restoration and reconstruction from the recent natural disasters as well as to
strengthen the framework for disaster prevention. As these developments show, public
investment is expected to increase.
To summarize what I have talked about so far, regarding the outlook for Japan's economy,
exports and production are projected to continue showing some weakness for the time being,
with a in the global economy being delayed. As for domestic demand, the pace of
pick-up
increase is expected to decelerate temporarily due to the effects of the global economic
slowdown and the consumption tax hike. However, from a somewhat
longer-term
perspective, it is expected that domestic demand will remain firm and that, as projected by
the IMF, the global economic growth rate will rise. Thus, Japan's economy is likely to
continue on an expanding trend, albeit at a moderate pace.
II. Price Developments
Next, I will explain price developments in Japan (Chart 9). Looking back from a
long-term
perspective, for many years starting from the late 1990s, Japan's economy was in deflation
in terms of a sustained decline in prices. Reflecting this situation, the Bank introduced
quantitative and qualitative monetary easing (QQE) in 2013, and since then has pursued
powerful monetary easing. At present, Japan's economy is no longer in deflation, in the
sense of a sustained decline in prices, with the economy improving significantly and the
positive annual CPI inflation taking hold.
Turning to recent price developments, the rate of change in the CPI excluding
year-on-year
fresh food has remained at around 0.5 percent, partly due to the effects of the past decline in
crude oil prices and reductions in prices. The CPI has continued to show
mobile-related
relatively weak developments compared to the economic expansion and tight labor market
conditions. This is mainly because the mindset and behavior based on the assumption that
wages and prices will not increase easily have been deeply entrenched among firms and
households, due to the experience of prolonged low growth and deflation. Under these
circumstances, the consumption tax rate was raised in October. The key point in looking at
future price developments is whether firms' stance will change as a result of
price-setting
the tax hike. I would like to show you two distinctive examples (Chart 10). The first
concerns developments in prices of durable goods. As for goods such as televisions and
household electrical appliances, an increase and reactionary decline in demand prior to and
after the tax hike have been observed. Prices were somewhat strong before the tax hike,
when demand increased. However, has been mixed since the tax hike, when
price-setting
demand declined in reaction to the increase. Whereas the rate of change in
year-on-year
prices of televisions and laptops which have relatively large price fluctuations has
-- --
turned negative since the tax hike, the rate of increase in prices of durable household goods
such as refrigerators and vacuum cleaners has remained at a relatively high level. The
second example concerns developments in prices of services such as In the case
dining-out.
of services prices, it can be confirmed that the tax hike has been passed on steadily. While
the consumption tax rate for was raised to 10 percent, the rate for food products,
dining-out
including meals such as deli food, is unchanged at 8 percent due to the
ready-made
introduction of a reduced tax rate. For this reason, it had been pointed out that the tax hike
might not be fully passed on to prices, reflecting price competition with
dining-out
meals, and that prices excluding the consumption tax could weaken.
ready-made dining-out
However, looking at developments in such prices in October, it appears that the tax hike has
been passed on almost completely. Although the industry is making efforts to
dining-out
save labor and improve efficiency in response to increases such as in personnel expenses
and distribution costs, there have been moves to gradually pass on cost increases that cannot
be absorbed through such efforts. This suggests that many dining firms have
out-related
passed on the tax hike to selling prices. These moves also can be observed in other services.
Of course, attention needs to be paid to the fact that firms' behavior may
price-setting
change depending on future developments in consumption. However, no major change in
their stance has been observed so far and it seems that firms have continued to
price-setting
pass on costs including the consumption tax.
Taking account of this situation, I will explain the Bank's view on the outlook for prices.
For the time being, it is likely that the rate of change in energy prices will
year-on-year
remain negative due to the effects of the past decline in crude oil prices, and thereby push
down the CPI. However, from a somewhat perspective, the Bank projects that
longer-term
the inflation rate will rise gradually, with firms' and households' perception of prices
improving in a situation where the economy continues on an expanding trend. While it is
expected to still take time to achieve the price stability target of 2 percent, the inflation rate
is likely to increase gradually toward 2 percent. One of the assumed important mechanisms
for the achievement of such price rises is the output gap of the economy as a whole (Chart
11). Looking at the output gap, which shows the balance between aggregate demand and
supply, a positive gap has taken hold for the past few years, with demand exceeding supply.
Based on the outlook for economic activity that I mentioned earlier, although the output gap
is likely to narrow temporarily within positive territory, mainly due to the effects of the
global economic slowdown and the consumption tax hike, it is expected to remain at around
the current level on average. Under these circumstances, as households' tolerance of price
rises increases, reflecting a rise in wages, and firms' stance shifts toward further raising
prices, not only firms' moves to pass on cost increases but their active moves to raise prices
that reflect developments in demand are likely to be more widespread. With wages and
prices continuing to rise, the deeply entrenched mindset and behavior among people based
on the assumption that wages and prices will not increase easily are expected to change
gradually; accordingly, inflation expectations that is, people's expectations for future price
--
developments are projected to rise. As these developments show, the Bank recognizes that
--
the momentum toward achieving the price stability target has been maintained, whereby a
positive output gap results in an increase in actual prices and then in a rise in inflation
expectations, leading to a gradual rise in the inflation rate.
III. The Bank's Conduct of Monetary Policy
Next, I would like to explain the Bank's conduct of monetary policy.
The Bank has been conducting "QQE with Yield Curve Control," aiming to achieve the
price stability target of 2 percent (Chart 12). It has pursued powerful monetary easing;
specifically, the Bank sets the policy interest rate at minus 0.1 percent and the
short-term
target level of Japanese government bond (JGB) yields at around zero percent, and
10-year
has conducted JGB purchases in the market.
large-scale
The Bank considers that, at present, downside risks to economic activity and prices, mainly
regarding developments in the global economy, require the most attention. As I mentioned
earlier, there are various downside risks surrounding the global economy. If the
materialization of these risks leads to a longer delay in the timing of a in the global
pick-up
economic growth pace or to a further deceleration in the global economy, Japan's economy
inevitably will be affected. In this case, prices could be affected to some extent through
downward pressure on the output gap, which is one of the important factors that determine
price developments. Based on this recognition, since July, the Bank has clearly shown its
policy stance of being tilted toward monetary accommodation. In October, the Bank
clarified its stance to maintain the present levels of the policy rates or, depending on the
situation, lower them from the present levels, as long as downside risks remain significantly
high, as in the current situation. The Bank considers that downside risks to economic
activity and prices, mainly regarding developments in the global economy, will continue to
warrant close monitoring, and thus the policy stance of being tilted toward monetary
accommodation will be appropriate for the time being. It will continue to carefully examine
various risks and not hesitate to take additional easing measures if there is a greater
possibility that the momentum toward achieving the price stability target will be lost.
So far, I have talked about the Bank's basic stance of monetary policy conduct. In such
conduct, the Bank considers it important to take into account both the effects and side
effects of monetary policy, including those on financial markets and the functioning of
financial intermediation. On this point, it recognizes that prolonged downward pressure on
financial institutions' profits, with the low interest rate environment and severe competition
among financial institutions continuing, could create risks of a gradual pullback in financial
intermediation and of destabilizing the financial system. Although these risks are judged as
not significant at this point, mainly because financial institutions have sufficient capital
bases, the Bank will continue to examine these risks as well as those considered most
relevant to the conduct of monetary policy and pursue such conduct in an appropriate
manner, taking account of developments in economic activity and prices as well as financial
conditions.
Conclusion
Lastly, I would like to say a few words about Okayama Prefecture's economy.
Okayama Prefecture's economy has been on a moderate expanding trend on the back of firm
domestic demand. While the U.S.-China trade friction as well as relatively weak
developments in the Chinese economy are affecting exports and production, business fixed
investment has remained at a high level. Private consumption has been on a pick-up trend,
although fluctuations in demand resulting from the consumption tax hike have been
observed. Despite the severe damage caused by the heavy rain last year, Okayama
Prefecture's economy has maintained a virtuous expansionary cycle supported by the hard
work of residents, firms, and the local government.
Blessed by a favorable climate that earned it the name "The Land of Sunshine," Okayama
Prefecture has developed the commerce and logistics rooted in its history as a transportation
hub. Its manufacturing industries, as exemplified by the Mizushima Coastal Industrial Zone,
have been a driving force in Japanese manufacturing. Moreover, the prefecture is rich in
culture, as shown by its many ancient castles, Bizen ware, Korakuen, and the Kurashiki
Bikan Historical Quarter, as well as in natural blessings such as its hot springs, fruits, and
the delights of Setouchi, which appeal to visitors from Japan and abroad. The promotion of
tourism based on these attractions is making progress, and with the "Okayama Art Summit"
and the "Setouchi Triennale" having been held this year, many people from Japan and other
countries have been visiting Okayama Prefecture.
On the other hand, despite these riches, Okayama Prefecture is very similar to other regions
in that it has to address the declining and aging population. However, by thinking ahead
using their insight, the people of Okayama seem to have overcome various challenges at
different times. During the Edo period, under the feudal Ikeda clan, Kojima Bay was
reclaimed and agricultural productivity was dramatically improved. In the Meiji period,
Magosaburo Ohara introduced the latest technology of the time to lay the foundations for
the development of the textile industry and set up a factory providing a work environment
that is in line with today's thinking about work-style reforms. Thereafter, with scars from
the war remaining, the development scheme for Mizushima was launched in 1952, and the
industrial complex that emerged played a leading role in the development of Japan's
manufacturing industry. Recently, the promotion of regional development centered on
forestry in the north of the prefecture has been bearing fruit and has become a model for
regional revitalization nationwide.
I hope that the growth potential of Okayama Prefecture will be enhanced through
collaborative efforts by its people as well as firms and the local government to build up the
prefecture's strengths, as seen in their cooperation aimed at overcoming the damage caused
by the heavy rain. The Bank, and in particular its Okayama Branch, will seek to play a part
in contributing to the further development of Okayama Prefecture's economy.
Thank you for your attention.
Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Okayama
December 12, 2019
Masayoshi Amamiya
Deputy Governor of the Bank of Japan
Introduction
I. Financial and Economic Developments
II. Price Developments
III. The Bank's Conduct of Monetary Policy
Conclusion
Chart 1
I. Financial and Economic Developments
Global Economy's Growth Rate and Trade Volume
Global Growth Rate World Trade Volume
y/y % chg. y/y % chg.
6
6.0
5.5
5
5.0
4.5
4
4.0
3
3.5
3.0
Projections
2
2.5
Average from 1980 2017 3.8
2.0 through 2018:
1
+3.5%
2018 3.6
1.5
2019
3.0
0
1.0
[Projection]
2020
3.4
0.5
[Projection]
-1
0.0
-0.5
-2
CY 00 02 04 06 08 10 12 14 16 18 20
CY 12 13 14 15 16 17 18 19
Notes: 1. In the left chart, figures for 2019 and 2020 are the IMF's projections as of October 2019.
Notes: 2. In the right chart, figures are for real imports.
Sources: IMF; CPB Netherlands Bureau for Economic Policy Analysis.
1
Chart 2
I. Financial and Economic Developments
Global Economic Slowdown
Motor Vehicle Sales
Global Business Sentiment Global Machinery
in Major Economies
in Manufacturing Sector Investment
s.a., DI y/y % chg.
s.a., ann., mil. units
56
6
30
United States
Manufacturing PMI
5
Euro area
25
China
India
4
53
20
3
15
2
50
10
1
5
0
47 -1 0
CY 15 16 17 18 19 CY 15 16 17 18 19 10 12 14 16 18
CY
Global Cycle for IT-Related Goods
Shipments-Inventories Balance
World Semiconductor Shipments
of IT-Related Goods in Japan
s.a., q/q % chg. % points
10 50
Increase in shipments exceeds
40
that in inventories
30
5 Shipments - Inventories
20
10
0
0
-10
-20
-5
-30
-40 Increase in inventories exceeds
that in shipments
-10
-50
CY 10 11 12 13 14 15 16 17 18 19
CY 1 5 1 6 1 7 1 8 1 9
Notes: 1. In the left chart, figures are based on BOJ staff estimates using WSTS data.
Notes: 2. In the right chart, figures are for electronic parts and devices.
Source: Ministry of Economy, Trade and Industry. 3
Chart 4
I. Financial and Economic Developments
Japan's Exports and Production
Exports Industrial Production
s.a., CY 2015=100
s.a., CY 2015=100
120
130
Capital goods
115
125
Motor vehicles and related goods
IT-related goods
110
120
105
115
100
110
105 95
Capital goods
100 90
Motor vehicles
95 85
IT-related goods
90
80
CY 13 14 15 16 17 18 19 13 14 15 16 17 18 19
CY
Domestic Demand
Domestic Demand and Exports Breakdown of Domestic Demand
s.a., CY 2012=100 s.a., CY 2012=100
s.a., CY 2012=100 s.a., CY 2012=100
110 150 110 140
130
105 125 105 120
110
100 100
100 100
Domestic demand (left scale)
Private consumption (left scale)
90
Public demand (left scale)
Exports (right scale)
Private non-resi. investment (right scale)
95 75 95 80
CY
CY 12 13 14 15 16 17 18 19 12 13 14 15 16 17 18 19
Notes: 1. In the left chart, figures for domestic demand are the sum of private consumption, private residential investment, private non-residential investment, and public demand
(government consumption and public investment).
Notes: 2. In the right chart, figures for public demand are the sum of government consumption and public investment.
5
Source: Cabinet Office.
Chart 6
I. Financial and Economic Developments
Business Fixed Investment
Research and
Software Investment Construction Investment
Development Investment
s.a., ann., tril. yen
FY 2012=100
FY 2005=100
12
155
400
Construction
Firms' plans
150
Firms' plans
All industries
11
350 Retailing
145
Transport equipment
Accommodations, eating &
140
10
300 drinking services
Chemicals
All industries
135
130
250 9
125
200 8
120
115
150
7
110
105
100 6
100
95
50 5
05 07 09 11 13 15 17 19 FY 12 13 14 15 16 17 18 19
FY CY 05 07 09 11 13 15 17 19
Notes: 1. In the left chart, figures through fiscal 2018 are actual results. Figures for fiscal 2019 are forecasts from the September 2019 survey.
Notes: 2. In the middle chart, figures are for firms with capital of 1 billion yen or more on a consolidated basis. Figures for fiscal 2019 are based on BOJ staff calculations adjusted for
average changes from planned to actual expenditure for fiscal 2012-2018.
Notes: 3. In the right chart, figures are the estimated construction costs of private nonresidential buildings.
6
Sources: Development Bank of Japan; Ministry of Land, Infrastructure, Transport and Tourism; Bank of Japan.
Machinery Orders
Capital Goods-Related Industries
Manufacturing and
and Automobile-Related Industries
Nonmanufacturing
s.a., CY 2012=100
s.a., CY 2012=100
180
160
General-purpose, production,
Manufacturing
150
and business-oriented machinery
Automobiles, parts, and accessories
160
Nonmanufacturing
140
130
140
120
120
110
100
100
90
80
80
12 13 14 15 16 17 18 19
CY CY 12 13 14 15 16 17 18 19
Note: In the left chart, figures for nonmanufacturing exclude those for ships and electric power companies.
Source: Cabinet Office. 7
Chart 8
I. Financial and Economic Developments
Developments in Consumption Prior to and After the Tax Hikes
Overall Household Electrical Appliances
s.a., average 16-18 months before the tax hike=100 s.a., average 16-18 months before the tax hike=100
106 150
140
October 2019 tax
104
h