J u n e 2 7 , 2 0 1 9
Bank of Japan
Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Aomori
Masazumi Wakatabe
Deputy Governor of the Bank of Japan
Introduction
Good morning. It is my pleasure to have the opportunity today to exchange views with
administrative, financial, and business leaders in Aomori Prefecture. This is my first
meeting of this kind since the start of the Reiwa era. Aomori Prefecture is blessed with a
rich natural environment such as the Shirakami Mountains, which are registered as a World
Heritage site, Lake Towada, and the Hakkoda Mountains. It has a long history represented
by a Jomon clay figurine designated as a national treasure, as well as the Sannai-Maruyama
Site. It also is an area distinguished by a rich culture that has produced many intellectuals
and artists, such as Shoeki Ando (philosopher), Osamu Dazai (novelist), Shuji Terayama
(poet and playwright), and Noriko Awaya (singer). The Bank of Japan's Aomori Branch was
established in 1946. I heard that, due to a shortage of materials at the time, there were great
difficulties in constructing the branch building. Since then, the branch has operated to the
present owing to support from people in the region. I would like to take this opportunity to
express my sincere gratitude for your cooperation with the activities of the branch.
Today, I would like to hear your views on the current status of the local economy, as well as
your candid opinions about the Bank's policies and activities. First, I will briefly explain
developments in Japan's economic activity, and then talk about the Bank's conduct of
monetary policy, regional financial institutions in Japan, and economic developments in
Aomori Prefecture.
I. Economic Developments
A. Economic Improvement since 2013
First, I would like to take a look at how Japan's economy has changed under quantitative
and qualitative monetary easing (QQE) that the Bank introduced in April 2013.
Looking back, Japan's economy suffered a significant downturn due to the Global Financial
Crisis in 2008, and thereafter remained below the pre-crisis level until around 2012. In
contrast, since 2013, it has followed an improving trend under the Bank's monetary easing,
albeit with fluctuations (Chart 1). Domestic demand such as private consumption and
business fixed investment has been increasing more considerably than the previous recovery
phase of around 2002-2008, despite slower growth in external demand (Chart 2). This
suggests that, even amid a weaker tailwind from overseas, well-balanced economic growth
has materialized as domestic demand has been stimulated strongly, partly by various policy
measures.
The well-balanced growth of Japan's economy since 2013 also can be evidenced by an
improvement in the employment and income situation. Labor market conditions have
continued to tighten steadily in Japan, with the active job openings-to-applicants ratio rising
to the level seen in the 1970s and the unemployment rate declining to the level observed in
the early 1990s (Chart 3). A notable feature of such improvement is a substantial increase in
the numbers of employed persons and employees. This shows that tight labor market
an increase in labor
conditions in the current phase are attributable to demand, rather than
to a decrease in labor supply that results from a decline in the working-age population. If
labor market conditions had tightened, due mainly to a decline in labor supply, the number
of employees would have declined since the number of those who wish to work would
decrease with wages unchanged and the labor supply curve would shift to the left (Chart
4).1 In reality, the number of employees has continued to increase, along with a moderate
rise in wages, and therefore employee income has continued to register relatively high
growth. Such improvement in the employment and income situation, together with
generally favorable corporate profits, has supported solid domestic demand.
B. Effects of the Monetary Easing
I think that the Bank's monetary easing has contributed greatly to achieving economic
growth, in which domestic and external demand have increased in a well-balanced manner
1
Compared to the fact that the numbers of employed persons and employees have increased
significantly since 2013, wage increases have been relatively weak. This suggests that the labor
supply curve could have shifted to the right -- the direction indicating that the labor supply has
increased. Although the continued decline in the working-age population aged 15-64 can contribute
to shifting the labor supply curve to the left, there is a possibility that mainly women and seniors
have become more willing to work, due to the progress in labor market reform that enabled various
working styles, the extension of healthy life expectancy, and the rise in expectations that labor
market conditions will remain tight. Firms seem to be addressing demographic changes including the
declining birthrate and aging population proactively by, for example, taking various steps to secure
their labor force and expanding labor-saving investment, rather than merely considering these
changes as constraints.
accompanied by the improvement in the employment and income situation. In what follows,
I will explain the effects of the monetary easing since 2013, by describing changes in
financial conditions and its impact on economic and price developments.
Let me start with the changes in financial conditions. Since the introduction of QQE in 2013,
Japan's interest rates have declined significantly. The decline in interest rates has stimulated
the private sector's credit demand and improved financial institutions' lending attitudes.
These have resulted in a clear increase in the amount outstanding of funding in the private
sector (Chart 5). There is considerable evidence that the financing environment for firms
has improved considerably under the monetary easing.
I will move on to the effects of the monetary easing on economic activity and prices. It can
be said that it has led to an upturn in the economic and price situation by, for example,
producing accommodative financial conditions and influencing people's expectations, as
well as through a resultant rise in asset prices. Since the actual economic and price
conditions are subject to various factors, it is not easy to quantify the effects of the
monetary easing alone. That being said, let me introduce one simulation of how economic
activity and prices would have developed since 2013 if the Bank's QQE had not been
introduced (Chart 6). Although the estimation results should be interpreted with a certain
latitude, this analysis suggests that (1) QQE has strongly stimulated economic activity and
prices through, for example, a decline in interest rates, and (2) without QQE, it is highly
likely that the current situation where Japan's economy is no longer in deflation could not
have been achieved amid a continuous shortage in demand.2
2
The simulation shown in Chart 6 is based on a vector auto-regressive (VAR) model consisting of
the following variables: the monetary base, interest rates for different maturities, the output gap, the
consumer price index (CPI) excluding fresh food and energy, and the foreign exchange rate. The
future path of the output gap and the CPI was simulated assuming that there had not been any shocks
on interest rates or the monetary base. The results are generally consistent with those presented in
the Bank's Comprehensive Assessment released in September 2016, which estimated the effects of
QQE on economic and price developments based on a large-scale semi-structural model of Japan's
economy.
The effects of the monetary easing are exerted so indirectly through mainly interest rates
that people cannot feel them easily. However, I would like to emphasize that the monetary
easing in fact has been underpinning the economy firmly from various aspects as I
explained earlier.
C. Current Situation and Outlook for Japan's Economy
I have described so far that Japan's economy has been on an improving trend since 2013
under the Bank's monetary easing. However, exports and production have been relatively
weak since early this year amid growing concern about deceleration in overseas economies
(Chart 7).
On this point, the Bank currently assesses that Japan's economy has maintained its moderate
expanding trend, although exports and production have been affected by the slowdown in
overseas economies. The monetary easing has been sustaining steady domestic demand.
Also, as for the outlook, the main scenario is that the economy is likely to continue
expanding moderately as a trend, with the growth rates of overseas economies rising
somewhat and domestic demand maintaining its firmness (Chart 8).
More recently, however, further attention needs to be paid to downside risks to the main
scenario. The latest economic outlooks by international organizations such as the
International Monetary Fund (IMF) also have pointed out that, although the global
economic growth rate is projected to increase somewhat from the second half of 2019, this
scenario entails substantial uncertainties. Most notably, the trade friction between the
United States and China involves significant issues beyond mere economic problems --
such as the competition in advanced technologies and national security -- and it may be
difficult to resolve these issues fundamentally in a short period of time. The negotiation
between the two countries is still underway, so we should not be too pessimistic. If the trade
friction becomes prolonged or persistent, however, downward pressure on the global
economy may heighten not only through the direct effects of the tariff hikes but also
deterioration in firms' fixed investment stance and financial market sentiment.3 In Europe,
uncertainties over political developments including negotiations on the United Kingdom's
exit from the European Union (EU) remain high, and in the Middle East, for example,
geopolitical risks warrant careful attention.
If the slowdown in overseas economies becomes prolonged, downward pressure on
domestic demand may strengthen gradually. In addition, there remains a risk that the
scheduled consumption tax hike this October may push down domestic demand and
eventually economic activity and prices.
II. Conduct of Monetary Policy
A. Why Is the Price Stability Target of 2 Percent Necessary?
Next, I will talk about our conduct of monetary policy. The Bank has conducted monetary
easing policy with a view to achieving the price stability target of 2 percent. At my previous
meeting with business leaders held in Niigata last December, I elaborated on why the Bank
has set the price stability target at 2 percent.4 Setting the target level at 2 percent is a global
standard; if we lowered the target, deflationary pressure would be exerted through changes
in people's expectations as well as in foreign exchange rates and asset prices. In addition,
the Bank does not consider it sufficient if only prices go up; rather, it thinks that achieving
the 2 percent target contributes to the sound development of the national economy -- for
example, increases in nominal GDP, corporate profits, household income, and the number
of employees, as well as fiscal soundness. A rise in labor costs has been pointed out in
recent years as one of the factors behind price rises. Labor costs are, in other words, wages
and salaries. Increases in wages and salaries will lead to price rises, but it also is true that
3
According to the G-20 Surveillance Note written by IMF staff this June, it is estimated that global
GDP is likely to be lower by 0.5 percent in 2020, taking into account the impact of an increase in
tariffs on 200 billion dollars' worth of United States imports from China from 10 percent to 25
percent, the possible 25 percent tariff on the roughly 267 billion dollars' worth of United States
imports from China, and the tariff hikes already conducted in 2018. For details, see
https://www.imf.org/external/np/g20/pdf/2019/060519.pdf.
4
Masazumi Wakatabe, "Japan's Economy and Monetary Policy," speech at a meeting with business
leaders in Niigata, December 5, 2018, http://www.boj.or.jp/en/announcements/press/koen_2018/data
/ko181205a1.pdf.
firms are not able to raise wages and salaries in a situation where they cannot increase the
prices of their products and services.
In this speech, I would like to explain the Bank's monetary policy from a somewhat
different perspective. The Reiwa era has just started. Most of the Heisei era, which lasted
from January 1989 to April 2019, was one of deflation, and marked by a battle against it.
Unfortunately, economic activity also stagnated during that period. While there have been
various views to explain what caused deflation, we have to note with the utmost seriousness
that only Japan fell into prolonged deflation among advanced economies, the rest of which
achieved inflation of around 2 percent for most of the time.5
However, under the Bank's price stability target of 2 percent, Japan's economy is no longer
in deflation. Since the introduction of QQE in April 2013 in particular, the inflation rate on
average has increased from around 0.5 percent in negative territory to around 0.5 percent in
positive territory. This improvement was achieved under the Bank's clear commitment to
the 2 percent target and the monetary easing pursued in line with it (Chart 9).
B. Cause of Low Interest Rates: Decline in the Natural Rate of Interest
That being said, the inflation rate has not yet reached 2 percent, being in the range of
0.5-1.0 percent when excluding fresh food, and therefore the Bank's monetary easing has
continued for a long period of time. In this situation, there are requests for higher interest
rates. Some may think that the Bank can raise interest rates because it can control them as it
wants. But the reality is not that simple.6
5
Kataoka Goushi, Nihon no "Ushinawareta 20-nen": Defure o koeru keizai seisaku ni mukete
(Tokyo: Fujiwara-Shoten, 2010); Masazumi Wakatabe, Japan's Great Stagnation and Abenomics:
Lessons for the World (New York: Palgrave Macmillan, 2015); Takenaka Heizo, Heisei no kyōkun:
Kaikaku to gusaku no 30-nen (Tokyo: PHP Institute, Inc., 2019); and Iwata Kikuo, Naze defure o
hōchi shite wa ikenai ka: Hitode busoku keizai de yomigaeru Abenomikusu (Tokyo: PHP Institute,
Inc., 2019).
6
For one example as an answer to the same question in the United States, see Stanley Fischer,
"Why Are Interest Rates So Low? Causes and Implications," remarks at the Economic Club of New
York, October 17, 2016, https://www.federalreserve.gov/newsevents/speech/fischer20161017a.htm.
Why have interest rates remained low in the first place? Interest rates are low not only in
Japan but in other advanced economies. In economics, it is said that if you want to raise a
rate, cut it first; if you want to cut a rate, raise it first. A central bank lowers interest rates
when the economy slips into a downturn with a higher risk of deflation. Then, as the
inflation rate goes up, reflecting the economic recovery, a central bank raises interest rates
accordingly.
Let me elaborate on this. Monetary policy today is based on the following understanding.
The level of the interest rate that balances savings and investment and neither accelerates
nor decelerates the economy is called the natural rate of interest, or the equilibrium real
interest rate. A central bank conducts monetary policy using the natural rate of interest as a
reference point. Specifically, at a time of an economic downturn, a central bank stimulates
the economy by guiding the actual interest rate to a level below the natural rate of interest.
When the economy is overheated, a central bank raises the interest rate to a level above the
natural rate of interest.
As the natural rate of interest is just an estimate based on a theoretical model and entails
uncertainties, it should be interpreted with a certain latitude.7 With this in mind, I would
say that the natural rates of interest have declined in many advanced economies including
Japan (Chart 10).
In the case of Japan, the natural rate of interest declined sharply in the early 1990s. In other
advanced economies, the rates have decreased since the Global Financial Crisis. This
suggests that the natural rates of interest have been affected by the bubble burst as well as
financial and economic crises. Generally speaking, the reason behind a decline in the
natural rate of interest is one of the following: an increase in savings, a decrease in
7
Jerome H. Powell, "Monetary Policy in a Changing Economy," speech at a symposium titled
"Changing Market Structure and Implications for Monetary Policy" held in Jackson Hole sponsored
by the Federal Reserve Bank of Kansas City, August 24, 2018, https://www.federalreserve.gov
/newsevents/speech/powell20180824a.htm; and Richard H. Clarida, "Models, Markets, and
Monetary Policy," speech at the Hoover Institution Monetary Policy Conference titled "Strategies for
Monetary Policy" held at Stanford University, May 3, 2019, https://www.federalreserve.gov
/newsevents/speech/clarida20190503a.htm.
investment, or a combination of these two. For example, when households and firms seek to
increase their savings in the event of an economic crisis, the supply of funds in the economy
will increase and the natural rate of interest will decline. If growth expectations deteriorate
due partly to an economic crisis or a decrease in productivity, and thereby firms become
less willing to make investment, actual investment will decrease and the natural rate of
interest consequently will decline. Demographic changes such as the declining birthrate and
aging population also are pointed out as causes of the decline in the natural rate of interest.8
Moreover, some say that a global saving glut plays a major role and others point to the
possibility of "secular stagnation."9
In a case where the natural rate of interest declines for any reason, a central bank needs to
lower interest rates accordingly because otherwise the economy will be under deflationary
pressure. In Japan, short-term nominal interest rates already have reached close to 0 percent
since the 1990s. In light of this situation, the Bank has taken such measures as (1) lowering
long-term interest rates through purchases of Japanese government bonds (JGBs), (2)
introducing a negative interest rate policy to guide short-term nominal interest rates to
negative territory, (3) adopting an inflation-overshooting commitment, under which the
Bank will continue expanding the monetary base until the year-on-year rate of increase in
the observed CPI exceeds 2 percent and stays above that level in a stable manner, and (4)
8
The following study examines the effects of demographic changes on the natural rate of interest.
Assuming that a decline in labor force lowers the economic growth rate and that the extension of
longevity results in an increase in savings, this study estimates that about 270 basis points can be
attributed to demographic changes out of the 640 basis points decline in real interest rates over the
past 50 years in Japan. Nao Sudo and Yasutaka Takizuka, "Population Aging and the Real Interest
Rate in the Last and Next 50 Years: A Tale Told by an Overlapping Generations Model," Bank of
Japan Working Paper Series, no.18-E-1, January 2018, https://www.boj.or.jp/en/research/wps_rev
/wps_2018/data/wp18e01.pdf. However, attention should be paid to the fact that the study does not
take into account the effects of financial crises as factors causing a decline in the natural rate of
interest.
9
Secular stagnation refers to a situation where aggregate demand in an economy remains below its
potential supply capacity for a long time, resulting in a further decline in the capacity. For more
details on the decline in the natural rate of interest and secular stagnation, see a collection of papers
by Lawrence H. Summers, Ben S. Bernanke, Paul Krugman, and Alvin H. Hansen in Keiki no
kaifuku ga kanjirarenai no wa nazeka: Chōki teitai ronsō, ed. and trans. Hiroo Yamagata (Kyoto:
Sekaishisosha Co., Ltd., 2019), available only in Japanese.
introducing forward guidance stating that the Bank intends to maintain the current
extremely low levels of short- and long-term interest rates for an extended period of time.
Once an economy falls into deflation, households and firms will strengthen their
expectations that deflation may continue. Especially when deflation lasts for a long time as
in Japan, such expectations will heighten further. In that case, firms and households will
perceive interest rates as higher than the actually low level of nominal interest rates. We call
such perceived interest rates, which take into account inflation expectations, real interest
rates. The Bank's price stability target of 2 percent is expected to encourage firms and
households to strongly hold expectations that prices will rise steadily, resulting in a decline
in real interest rates.
The word "normalization" is often used with regard to monetary policy, but it is an
ambiguous term with an unclear definition. The ultimate objective of monetary policy is the
sound development of the national economy. In other words, it is not until the economic and
price situation is normalized that monetary policy also will be normalized.10 The Bank will
continue with the monetary easing for as long as it is necessary to achieve the price stability
target of 2 percent in a sustainable manner.
C. Discussions over the Monetary Policy Framework
Amid low interest rates and low inflation observed globally, central banks and academics
have had discussions that mainly regard the monetary policy framework. The Bank of
Canada reviews its monetary policy framework every five years; the Federal Reserve
recently has discussed whether to update its framework.11 Key points of such discussions
including these can be summarized as the following.12
First, through the experience of Japan's battle against deflation and the U.S. and European
economies following the Global Financial Crisis, policy tools such as QQE, a negative
interest rate policy, and forward guidance have been added to the central banks' "arsenal."
They will be used going forward depending on the situation.
Second, the inflation target framework has been proved effective even in the time of the
Global Financial Crisis and its aftermath, but it has been pointed out that, even in the United
States, where economic and price developments are relatively firm, interest rates have
remained lower and room for monetary policy response has become smaller than before.
Under these circumstances, there are ongoing debates in the United States and other
economies on what monetary policy framework should be adopted with a view to achieving
the medium- to long-term price stability. Various approaches have been proposed, such as
setting a higher inflation target and introducing average inflation targeting, price-level
targeting, the inflation target range, and nominal GDP targeting (Chart 11). Every approach
has its own advantages and challenges. Of course, Japan cannot be treated the same as other
economies such as the United States, where the inflation rate is already at around 2 percent.
The Bank judges at present that it is appropriate to maintain the current policy framework in
which it clearly commits to the price stability target of 2 percent and pursues the monetary
easing to achieve the target. That being said, I think it is necessary for the Bank to work
sufficiently on studies toward better monetary policy.
11
Regarding the Bank of Canada's review of its monetary policy framework to date, see
https://www.bankofcanada.ca/agreement-inflation-control-target/. As for the Fed Listens events that
the Federal Reserve has proceeded with, see https://www.federalreserve.gov/monetarypolicy
/review-of-monetary-policy-strategy-tools-and-communications-fed-listens-events.htm.
12
With regard to the challenges of and outlook for monetary policy at present, the following paper
by Ben S. Bernanke, former Chair of the Federal Reserve, is informative. See Ben S. Bernanke,
"Monetary Policy in a New Era," in Evolution or Revolution? Rethinking Macroeconomic Policy
after the Great Recession, ed. Olivier Blanchard and Lawrence H. Summers (Cambridge: The MIT
Press, 2019), pp.3-48.
III. Regional Financial Institutions in Japan
Next, I would like to talk about regional financial institutions in Japan. Needless to say, they
play an extremely useful role in regional economies. With accommodative monetary policy
lasting for a long period of time, the challenges faced by the regional financial institutions
in Japan and the impact of such monetary policy on them have come to draw attention.
Japan's financial system can be characterized as follows. First, indirect financing has been
dominant. Indirect financing is a form of finance in which depositary financial institutions
such as banks play a significant role in firms' funding. Second, particularly in regional
financial institutions, the ratio of deposits to overall financial liabilities is high while that of
corporate bonds and equities is low. Third, regional financial institutions in particular
depend on deposit-taking and lending activities.
However, financial institutions, not only in regions but in Japan as a whole, are now
entering a phase of drastic changes. Structural changes are taking place, such as the
declining population and aging, globalization, as well as technological innovation
evidenced by new entries to the settlement business from outside the financial sector.
National accounts data show that the corporate sector has become a net lender of funds
since the mid-1990s (Chart 12). This also is related to the decline in the natural rate of
interest that I mentioned earlier. Even among small and medium-sized firms, the ratio of the
so-called de facto debt-free firms -- defined as firms with cash and deposits that exceed
their total amount of borrowings -- has continued to increase, recently exceeding 40
percent.13
Structural factors such as these lie behind the decline in financial institutions' profits.
Interest rates used to be high worldwide, reflecting high inflation and high natural rates of
interest. However, unfortunately, it is unlikely for such an environment to be realized again
soon. At regional financial institutions, although net income has remained high in the long
run, pre-provision net revenue (PPNR) has continued to follow a declining trend. The
Financial System Report
released this April shows profit simulation for the next 10 years.
The results suggest that more than half of domestic regional banks are expected to run
deficits in 10 years if the borrowing demand of the corporate sector continues to decline at
the same pace as in the past. Of course, it should be noted that these results need to be
interpreted with a latitude as they are calculated based on certain assumptions (Chart 13).
Here, it is worth referring to the case of financial institutions in Europe, where a negative
interest rate policy has been introduced, as in Japan. The Financial System Report compares
financial institutions in Europe with those in Japan. Under a negative interest rate policy,
the former have made higher profits than the latter. This is partly because funding costs of
financial institutions in Europe have decreased against the background that the low interest
rate environment has lasted for a shorter period than in Japan, and therefore there has been
room for a further decline in deposit interest rates. Also, in Europe, the share of deposit
funding to overall financial liabilities is low, and the costs of market financing such as
issuing corporate bonds have been declining. Moreover, financial institutions in Europe
have secured various sources of revenue that are unsusceptible to changes in interest rates
by, for example, diversifying fees on services (Chart 14).
For higher profitability going forward, it is hoped that regional financial institutions will (1)
set lending rates that reflect risks appropriately, (2) depart from excessive dependence on
deposit-taking and lending activities by, for example, increasing fee-based income, and (3)
drastically improve their business efficiency.14 To push forward with these initiatives
strongly and effectively, the use of digital technology, integration or partnering among
financial institutions, and alliances with firms outside the financial industry can be effective
options. The Bank will continue to support these efforts by financial institutions.
IV. Economic Developments in Aomori Prefecture
Now, I would like to talk about the economy of Aomori Prefecture. Looking at current
developments, economic activity in Aomori Prefecture has been on a moderate recovery
trend, albeit at a slower pace. The production growth has decelerated, reflecting weaker
overseas demand. Business sentiment of primarily manufacturing firms has become
cautious, and thus business fixed investment has been more or less flat. Meanwhile, labor
market conditions have continued to tighten, and private consumption has maintained its
recovery trend with employee income improving.
Let me touch on the economic structure of the prefecture. The prefecture has experienced a
continued decline in population for 20 years longer than Japan overall and faced shrinking
internal demand. During this time, it has taken initiatives such as inviting firms and
managed to maintain its economic scale by attracting demand from other prefectures --
mainly the Tokyo metropolitan area -- and from overseas. It does not seem easy, however, to
keep its economic scale going forward as the population already has started to decrease
across the country. That being said, I also have felt during this visit that the prefecture has
many advantages in terms of overcoming the challenges. Also, it is not constructive to only
focus on the negative side of the declining population. Declining birthrates and aging
populations are now advancing worldwide. As I mentioned earlier, Japan's economy has
continued to improve moderately since 2013 despite a prolonged declining trend in
population. Even though the population continues to decrease, we can prepare
countermeasures if we factor that in beforehand. As aging population has progressed, the
healthy life expectancy has become longer. As evidenced by the fact that drones and
artificial intelligence (AI) already have started to be used in agriculture here, the declining
population can promote innovation.15
For example, Aomori Prefecture has abundant resources, such as one of the largest
agriculture, forestry, and fishery industries in Japan, manufacturing firms of worldwide
prominence, as well as a natural environment and culture that attract attention from all over
15
At the G20 Symposium co-hosted by the Bank of Japan and the Ministry of Finance on January
17, 2019, the theme of the discussion was "demographic changes and macroeconomic challenges."
In the session, Toshitaka Sekine, Director General of the Research and Statistics Department at the
Bank of Japan, discussed the extension of healthy life expectancy accompanied by that of longevity,
and Yasuyuki Sawada, Chief Economist of the Asian Development Bank (ADB), discussed the
possibility of the declining population promoting innovation. For more information, see
https://www.g20fukuoka2019.mof.go.jp/en/meetings/20190117.html.
the world. As a big fan of Jomon culture, I feel very encouraged to hear about the efforts to
register Jomon Archaeological Sites on the World Cultural Heritage List. I met people
working on vitalizing the local economy by making the most of these advantages. In
addition, Aomori Prefecture has diverse cultures, history, and economic structures,
depending on the area. To make use of such diversity, I hope that not only existing firms
will make active efforts, but also startups aiming at achieving new growth will be provided
with coordinated support by the industries, the administration, academics and research
institutions, as well as financial institutions. Such initiatives are expected to help the
prefecture make further progress toward its goal of realizing a self-sustaining economy. As
the central bank of Japan, we also will support the local economy by, for example,
analyzing the situation and disseminating information through the Aomori Branch. I would
like to ask for your continued cooperation regarding the activities of the branch going
forward.
Conclusion
Mitsuru Yoshida, known as the author of Senkan Yamato no saigo (Requiem for Battleship
Yamato), once worked as Gen