as many people live a life worrying about money. financial literacy skills such as managing personal finances are essential life skills in the modern world. in this regard, i would like to thank all the organizers of this festival. in a special way, i thank the ministry of education and sports who agreed that this year ’ s annual festival should focus on financial literacy. i also would like extend our gratitude to the commercial banks, the german society for international cooperation ( giz ) and other stakeholders for the efforts invested in this project. the financial literacy strategy launched in august 2013 recommended the incorporation of financial literacy into the secondary school curriculum as part of the overall reform of the curriculum. curriculum reform is currently underway at the national curriculum development centre and this process involves consultations with stakeholders such as giz and bis central bankers ’ speeches commercial banks. one of the teaching tools that has been developed in the financial literacy strategy ’ s short term life span of eleven months is the “ simplify money magnify life ” website. the website is a teaching aid targeted at financial services and products consumers as well as suppliers by providing factual data that can be a basis of financial decision making. i thank you all and wish you a pleasant 2014 annual national secondary schools ’ performing arts festival. bis central bankers ’ speeches

necessary, will make adjustments without hesitation in order to achieve the price stability target. what i would like to emphasize here is our strong commitment to achieving the price stability target of 2 percent. if japan ’ s economy follows a path toward the 2 percent target as we have projected, we will steadily pursue the current qqe. if not, we will make adjustments so as to achieve the 2 percent. in closing, let me briefly touch on the growth potential of japan ’ s economy. the bank ’ s qqe policy aims at escaping from a protracted deflationary equilibrium and achieving an economy in which people act on the assumption of inflation of about 2 percent. what has been happening in japan ’ s economy for the past 15 years is that declines in product prices led to a decline in firms ’ sales, which led to a further decline in prices through compressed wages and stagnant consumption, resulting in a vicious cycle. in such a deflationary economy, it is only rational for individual firms or persons to maintain the status quo, or to prefer cash, and therefore they did not consider it worth the risk, relative to the potential rewards, to embark on new business ventures. what we are aiming at is to break through this “ coordination failure ” and revive people ’ s animal spirits. this will be an important element in raising growth expectations and the growth potential. however, there is another important element to consider. as mentioned earlier, given that slack in the economy has shrunk, as seen in the tightening of labor market conditions, it also has become clear that it is imperative to strengthen supply capacity in order for japan ’ s economy to grow in the medium to long term. growth in the aggregate supply capacity of japan ’ s economy has been declining due partly to a declining trend in population and aging, as well as the slowing accumulation of capital stock under deflation. these trends, however, did not manifest themselves in the form of labor shortages or supply capacity constraints because demand had been weak. yet, in the past year or so, with the increase in demand thanks to large - scale monetary easing, fiscal spending, and the rejuvenation of private - sector activities, the supply capacity constraints that were lurking below the surface have now become apparent. in my view, with the supply capacity constraints having surfaced, this will be a golden opportunity to resolve the medium - to long - term challenges facing japan ’ s economy. these challenges, of which the public is well aware, include