takehiro sato : maximizing the potential of japanese government bonds ( jgbs ) as global financial assets – recent initiatives to improve the market infrastructure for jgb settlement speech by mr takehiro sato, member of the policy board of the bank of japan, at the international bankers association of japan, tokyo, 27 february 2014. * * * introduction it is a great honor to have this opportunity to speak at the international bankers association ( iba ) of japan. as an association of international financial institutions serving japan ’ s financial markets, iba has an impressive track record in facilitating exchange of views among member financial institutions and fostering dialogue with the relevant authorities. through those activities, iba greatly contributes to japan ’ s economy as well as the development of financial markets in japan. i pay my respect and extend my gratitude for constant efforts by the iba members. today, i will talk about the payment and settlement services provided by the bank of japan. in particular, i will focus on the future services for the settlement of japanese government bonds ( jgbs ). the bank has long put a great deal of effort into the development of payment and settlement systems. currently, we are carrying out a major project to renew the bank of japan financial network system or the boj - net, which forms an essential part of japan ’ s payment and settlement systems. i will talk about this project in more detail later on. to leverage a new capability in the new boj - net, we are discussing with the market participants, including several iba members of course, the possible extension of the bojnet operating hours. after those payment and settlement issues, i will close my speech with some remarks about the bank ’ s recent conduct of monetary policy. i. role of the bank of japan in payment and settlement systems the bank of japan plays a multi - faceted role in japan ’ s economy. it is responsible for monetary policy and, at the same time, as a bank for banks, it provides banking services and maintains the stability in the settlement of funds and securities in japan. the bank plays a multi - faceted role in the field of payments and settlements, too. first, the bank provides account and settlement services for the japanese yen and jgbs. second, the bank encourages the operators of private - sector payment and settlement systems to maintain and enhance the safety of their services, an important activity which is commonly called “ central bank oversight. ” 1 third, the bank cooperates with market

toshiro muto : the outlook for japana€™s economy summary of a speech given by mr toshiro muto, deputy governor of the bank of japan, at a meeting with business leaders, oita, 23 june 2005. * * * i. japan's economy : current situation and immediate prospects japan's economy has been at a temporary pause since summer 2004 due partly to adjustments in production and inventories of it - related goods. inventory adjustments in it - related sectors are still continuing, but steady progress has been made and production is increasing moderately. corporate profits have been at high levels, and this has not only led to an increase in business fixed investment but also had positive effects on the household sector through a rise in household income. the result is that private consumption has been steady, as evidenced by the fact that various sales indicators increased in the january - march quarter and have continued to be relatively strong. therefore, the underlying mechanism of economic recovery remains firm, although recently growth in exports has been sluggish, especially in those to china. in the not so distant future, the economy is likely to gradually emerge from the current plateau and move onto a sustainable growth path. the bank of japan's economic outlook is explained in detail in the outlook for economic activity and prices ( the outlook report ) released at the end of april 2005. in short, the economy is expected to experience a relatively long period of growth, albeit at a moderate pace. in terms of real gdp growth, the growth rate is expected to be around 1. 5 percent for both fiscal 2005 and 2006, slightly above the potential growth rate. on the price front, the consumer price index ( cpi ) has been declining slightly on a year - on - year basis partly due to the decline in rice prices and the reduction in electricity and telephone charges caused by the intense competition accompanying deregulation. the effects of the rise in domestic and overseas commodity prices, including the surge in crude oil prices, has been largely contained due to a decline in unit labor costs ( labor costs per unit of output ) : in other words, wage growth has been restrained compared to the rise in productivity. even though labor's share of the total value added generated by the corporate sector has declined to the level recorded in the early 1990s, many firms are still cautiously continuing to restrain labor costs. in addition, the effects of the decline in rice prices and the reduction in electricity and telephone charges are expected to continue for a while