policy measures based on the developments in the global economy and international financial markets described so far, i will now talk about the current situation of and outlook for japan ’ s economy and measures taken by the bank. for details, please refer to outlook for economic activity and prices released by the bank on october 28, 2011. a. japan ’ s economy following the earthquake on march 11, 2011, japan ’ s economy contracted sharply. this was due to the following factors : ( 1 ) production activity fell significantly nationwide due to the physical damage caused by the earthquake and tsunami to production facilities and the bis central bankers ’ speeches distribution infrastructure as well as the disruption of supply chains in the manufacturing sector, especially in the automobile industry ; ( 2 ) the nuclear power plant accident led to electricity shortages, which affected both manufacturing and non - manufacturing industries ; and ( 3 ) consumer sentiment weakened as a result of voluntary restraint following the disaster and the problem of radiation due to the nuclear power plant accident. 1. the current situation japan ’ s economic activity has been picking up steadily as the supply - side constraints caused by the disaster have been gradually resolved. supply - chain disruptions, for example, have been easing at a faster pace than expected thanks to the efforts made by those involved. production and real exports have returned to their pre - quake levels, although their rates of growth have moderated recently. while exports, particularly of automobiles, have increased, those of iron and steel products as well as digital cameras have declined. business fixed investment has been increasing moderately and the results of the september 2011 tankan ( short - term economic survey of enterprises in japan ) showed that business fixed investment plans, including those of small firms, were relatively firm. while the overall damage caused by the flooding in thailand is not clear at this stage, the impact on supply chains warrants careful attention, given that japanese firms, especially in automobile - related industries, have expanded their overseas production facilities for finished goods and parts and components, including in thailand, in recent years. meanwhile, although private consumption has almost returned to its pre - quake level, weakness remains in some areas as indicated by, for example, the fact that restaurant sales have not returned to their pre - quake levels. also, the number of foreigners visiting japan has remained below pre - quake levels. 2. outlook for economic activity and prices although adverse effects from the slowdown in overseas economies and the appreciation of the yen may continue for the time being, japan ’ s economy is expected to

application to virtual currencies / crypto - assets and promote a more consistent regulatory approach, taking into account the results of fatf ’ s stocktake exercise of the different national regulatory approaches. we must therefore follow progress made on this matter and adapt our legislation accordingly. conclusion fintech is definitely here to stay. regulators must therefore brace themselves to accept new technologies as forming an integral part of the financial landscape. in the process, the bank of mauritius is ensuring that it has specialized and trained resources to assist it in fulfilling its mandate and better understand innovative and disruptive technologies. i must nonetheless emphasise that fintech must be encouraged specially where, rather than disrupting the whole system, it adds value and facilitates certain processes or activities such as transaction monitoring, client on - boarding process, regulatory reporting. it can also enhance supervisory capabilities. the use of innovative technology in financial supervision can indeed assist in this endeavour. supervisory technology ( suptech ) can help to digitise reporting and regulatory processes, resulting in more efficient and proactive monitoring of risk and compliance at financial institutions. the bank of mauritius and the financial services commission are collaborating in ascertaining that any potential regulatory gaps are addressed and regulatory arbitrage eliminated. i am confident that the financial services sector has a bright future ahead and together with fintech firms, regulators, services providers and customers can embark on this transformational journey and design a new regulatory landscape and financial ecosystem for mauritius. thank you for your kind attention. 4 / 4 bis central bankers'speeches