kiyohiko g nishimura : toward overcoming deflationary pressures in japan speech by mr kiyohiko g nishimura, deputy governor of the bank of japan, at a meeting with business leaders, okayama, 18 april 2012. * * * introduction i am privileged and honored to be here today to exchange views with administrative and business leaders in okayama prefecture. i deeply appreciate your continuing support and cooperation in taking part in interviews and surveys conducted by our okayama branch. the quantitative and qualitative information from these interviews and surveys is invaluable to making timely assessments of economic conditions, and thus appropriate policy decisions. this can be especially true in the case of great uncertainty that follows events that profoundly alter economic and financial conditions, such as the lehman shock and the great east japan earthquake. although those events effectively render past statistical data uninformative or even utterly useless, the bank cannot delay its policy responses just for the sake of waiting for new data to be released. even in situations such as these, our regular contact with you provides us with valuable information about what is really happening in the real world in various respects. in fact, our colleagues at foreign central banks consider the bank of japan as fortunate and privileged in this regard. i would like to express my sincere gratitude and also ask for your continued cooperation. let me start today by discussing the economic outlook at present and its risk factors. after that, i would like to share the bank ’ s basic thinking on the necessary measures to overcome deflationary pressures. furthermore, i will explain the bank ’ s policy responses geared toward this aim – as put forth during the february and march monetary policy meetings – by answering frequently asked questions. in closing, i would like to touch upon some relevant issues for the economy in okayama prefecture. i. economic outlook at present and its risk factors a. economic outlook at present let me first describe the current domestic and overseas economic conditions and the outlook at present. first, i will start with developments overseas. despite the recent nervousness seen in the foreign exchange and stock markets, the funding environment for financial institutions in global financial markets has been calm and stable against the background of ample liquidity provision by the european central bank and certain progress in efforts to support greece. however, overseas economies as a whole have yet to emerge from a deceleration phase. in the united states, although some improvements have been observed in consumption and employment, such positive movements have not yet gained momentum, as evidenced

toshihiko fukui : bank of japan ’ s view on developments in economic activity and its conduct of monetary policy summary of a speech by mr toshihiko fukui, governor of the bank of japan, at a meeting with business leaders, osaka, 5 november 2007. * * * introduction in the year since i last spoke to you here, japan ’ s economy has continued to expand moderately, with a virtuous circle of growth in production, income, and spending in place. although there are uncertainties regarding overseas economies and global financial markets, the economy is likely to continue its moderate but sustained expansion. in the outlook for economic activity and prices ( hereafter the outlook report ), released at the end of last month, we have provided an outlook that, toward fiscal 2008, our economy will grow, under stable prices, at an average pace of around 2 percent, which is somewhat above its potential growth rate. today, i would like to explain the bank of japan ’ s view regarding developments in economic activity and prices and the basic thinking behind its conduct of monetary policy. i. the current situation and the outlook for japan ’ s economy i would first like to touch upon the current situation of japan ’ s economy. japan ’ s economy as a whole has continued to expand moderately, although the pace of improvement in the household sector has been somewhat slow relative to the strength in the corporate sector. exports to the united states have been somewhat weak, but the overall exports have continued to increase steadily as overseas economies taken as a whole have kept growing. in this situation, firms have continued to reinforce their capacity to supply products by increasing fixed capital with a view to capturing profit opportunities in overseas markets. the increase in corporate activity driven by strong exports, coupled with the extremely accommodative financial conditions, has led to growth in business fixed investment among a wider range of industries, including domestic demand - oriented industries. however, since business fixed investment has continued to increase at a rapid pace for the last several years and the level of capital investment is already high, the pace of growth is likely to decelerate gradually. the september tankan ( short - term economic survey of enterprises in japan ) indicated that steady growth in business fixed investment would continue, and the pace of increase would slow gradually. it also indicated that corporate profits have been high, and business sentiment has remained generally favorable although some cautiousness was reported in certain sectors. the positive influence of the strength in the corporate sector