things remain to be explored. we can never regain the two decades that have elapsed. but we can make full use of the insights obtained during the period in fulfilling our mission of bringing the economy back on track toward sustained growth and in contributing to building up effective safety nets to underpin financial stability in japan as well as in other countries. only when these tasks are done can we probably say, perhaps with a little bit of relief, that the spell the lost decades cast on us is at last broken, and that not everything was lost after all. thank you very much for your attention. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

the price stability target of 2 percent. for the good of japan ’ s economy, it is necessary to dispel people ’ s deflationary mindset that has taken hold amid deflation that has lasted for a long period. therefore, at present, i consider that it is most important to steadily pursue monetary easing to achieve the price stability target of 2 percent while paying attention to various effects that monetary easing may bring. we are only halfway to achieving the 2 percent price stability target. given this, i think that it is vital that the bank continue to steadily pursue qqe with a negative interest rate to achieve the price stability target. the bank aims to achieve the target of 2 percent at the earliest possible time. in order to do so in a sustainable and stable manner, i think that it is necessary that the target be achieved while the economy as a whole maintains the virtuous cycle in a balanced manner, such as with prices rising along with wage increases. the bank will continue to steadily pursue monetary easing, making full use of all possible measures in terms of the three dimensions of quantity, quality, and the interest rate to achieve the price stability target of 2 percent. iv. challenges for japan ’ s economy i would now like to express my thoughts regarding the current situation of japan ’ s economy from a longer - term perspective. in my view, the economy, which has experienced deflation for a long period of time, faces the challenge of strengthening its growth potential. japan ’ s potential growth rate as estimated by the bank has declined to around 0. 5 percent or lower, bis central bankers ’ speeches and this reflects factors including decreases in ( 1 ) the growth rate of capital stock due to postponement of business fixed investment, ( 2 ) labor input due to the aging of the population and the decrease in the number of hours worked, and ( 3 ) productivity growth due to sluggish innovation. in order to enhance the potential growth rate of the economy, i believe that it is important to steadily proceed with measures that will cause increases in these factors. let me elaborate on each of them. first, firms ’ fixed investment is made based on their future prospects and strict selection of such investment based on the quality criteria and on value added. they recently have been exhibiting moves such as the shifting of production sites back to japan and expanding investment in research and development. in order to manage risks and maintain sustainable growth, many japanese firms that face global risks seem to be in the process