toshihiko fukui : a review of the bank of japan ’ s conduct of monetary policy statement by mr toshihiko fukui, governor of the bank of japan, concerning the bank's semiannual report on currency and monetary control, before the committee on financial affairs, house of representatives, tokyo, 18 april 2003. * introduction * * the bank of japan ( hereafter, the bank ) submitted its semiannual report on currency and monetary control for the first half of fiscal 2002 to the diet in december 2002. i am pleased to have this opportunity to present an overall review of the bank's conduct of monetary policy. it has been almost a month since i assumed the governorship of the bank on march 20, 2003. the bank is determined to utilize all of its intellectual resources and expertise and do its utmost as a central bank, in order to put japan's economy back on a sustainable growth path and overcome deflation. i. developments in japan ’ s economy economic activity in japan remains flat as a whole. this is because, while business fixed investment has started to recover, there has been greater uncertainty about the economic outlook mainly reflecting developments overseas, especially the effects of the situation in iraq. looking at the economic outlook in more detail, with overseas economies following a gradual recovery path, exports and production are expected to resume their upward trend, which in turn will initiate the momentum for a recovery. however, there is uncertainty regarding the outlook for the united states and other overseas economies. japan's economy is very likely to lack the momentum for a self - sustained recovery for some time, taking into account persistent downward pressure on the economy stemming from the excessive labor input and debts. regarding prices in japan, with the rise in import prices and an improved supply - demand balance in materials industries, the decline in domestic corporate goods prices has, on the whole, almost come to a halt. consumer prices have been declining gradually, but looking forward, the pace of decline is expected to become somewhat slower due to the effects of ( 1 ) the rise in crude oil prices, and ( 2 ) the changes in the system of social security and indirect taxes. ii. financial developments financial markets have been generally stable, including through the fiscal year - end at the end of march 2003, reflecting ample liquidity provision by the bank. however, stock prices continue to be volatile, against the background of uncertainty about the economic outlook both at home and abroad. in particular, the weakness

masaru hayami : remarks on the bank ’ s view of japan ’ s recent economic and financial developments statement by mr masaru hayami, governor of the bank of japan, concerning the bank ’ s semiannual report on currency and monetary control ( before the committee on financial affairs, house of representatives, on 19 july 2002 ), tokyo, 5 august 2002. * introduction * * the bank of japan submitted its semiannual report on currency and monetary control for the second half of fiscal 2001 to the diet in june 2002. i appreciate this opportunity to present an overall review of the bank's recent conduct of monetary policy. today, i would like to make some remarks on the bank's view of japan's recent economic and financial developments and on the thinking behind our recent conduct of monetary policy. i. developments in japan ’ s economy japan's economy continued to deteriorate throughout 2001 and into early 2002, reflecting the rapid deceleration of the world economy due to adjustment in it - related industries. after the spring of 2002, however, the pace of the deterioration moderated, reflecting the recovery in overseas economies. recently, japan's economy has almost stabilized as a whole with an increasing upward impetus from exports and production, and an improvement in corporate profits and business sentiment. employment conditions continue to improve, albeit marginally, with an increase in overtime hours worked and in new job offers. in contrast, private demand, a key factor for a sustainable recovery of the economy, has not displayed any clear movement toward recovery. business fixed investment continues to decrease, and private consumption remains weak as a whole. as for the economic outlook, if overseas economies continue to recover, the stabilization of japan's economy will become more secure as the increase in exports and production will underpin domestic private demand through the improvement in corporate profits. however, considering that forces restraining the economy, such as excessive employment and debt, are still persistently at work, momentum for a self - sustaining recovery will be subdued for some time. in addition, uncertainty regarding external conditions which supported the recent economic recovery is rising somewhat amid a fall in stock prices in the united states and worldwide as well as depreciation of the u. s. dollar. regarding prices in japan, domestic wholesale prices have been generally leveling off, due partly to the effects of the increase in import prices in the past and of the completion of inventory adjustment. the pace of year - on - year decline in domestic wholesale prices has