june 21, 2023 bank of japan economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in kagoshima adachi seiji member of the policy board ( english translation based on the japanese original ) i. economic activity and prices a. economic activity first, i would like to touch on developments regarding covid - 19. while three years have passed since its outbreak, covid - 19 was downgraded in japan to a class v infectious disease under the infectious disease control law on may 8, 2023, bringing about further normalization of socioeconomic activity. although a certain degree of vigilance is necessary, leading examples of such normalization overseas suggest that covid - 19 will have much less impact on japan's economy than previously. taking this into account, i will now talk about recent developments in japan's economic activity. the economy has continued to recover moderately, although the pace of recovery has decelerated recently, as evidenced by some slowdown in certain indicators of private consumption and in exports. these developments in private consumption are likely due to price rises, and those in exports to a slowdown in the pace of recovery in overseas economies. let us look at private consumption in more detail. consumption of durable goods such as automobiles has recovered on the back of a waning of the effects of supply - side constraints. services consumption has also recovered, partly because demand that was suppressed during the pandemic has materialized as the economy reopens. therefore, private consumption overall has increased ( chart 1 ). that said, the effects of price rises have been observed. for instance, regarding consumption of items such as daily necessities, demand seems to have shifted to lower - priced goods and affordable private brand products. next, i will turn to exports. while exports to advanced economies have remained on an uptrend on the back of the waning of the effects of supply - side constraints, those to the nies, the asean economies, and some other asian economies have decreased due to weakness in global demand for it - related goods, as seen in a drop in exports of electronic parts, such as semiconductors mainly for smartphones and personal computers. those to china have also been somewhat weak, particularly for capital goods. in terms of total exports, they have been more or less flat recently ( chart 2 ). meanwhile, business fixed investment has been generally firm. this is attributable to firmness in ( 1 ) it

and collegial respect, grounded on the conviction that everyone has something to contribute to the organization. at the same time, let us always be mindful of protecting and strengthening our institution through risk based management and ensuring efficient resource management, among others. we should work on strengthening our financial position so we can pursue our mandate more effectively. the rms sector under andy suratos has led the way by implementing a bankwide energy conservation program for which we have been awarded a five - star rating of 97 %. think bsp. fellow workers at the bangko sentral. you have within you, we have within us, the capacity to make things better for our institution and for our country. our mandate empowers us to serve through responsive monetary and banking policies. let us therefore remain united in working on our vision of a better life for all filipinos. finally, on behalf of the members of the monetary board, i thank all of you for a job well done in the first half of the year, all things considered. let us also congratulate and thank cpo for organizing this insightful midyear organizational performance review session, and acknowledge all the other departments and offices that have provided support to this undertaking. mabuhay ang bangko sentral! mabuhay ang ating bansang pilipinas! maraming salamat sa inyong lahat! let ’ s enjoy the rest of the evening.