##atility of growth and the volatility of inflation, and we are prepared to accept some degree of inflation volatility to avoid throwing the real economy around too violently. of course, we have been immeasurably helped in doing this by the fact that inflation expectations have become more firmly anchored on the target. were inflation expectations to become dislodged, we would be obliged to return to a stricter and more vigorous pursuit of the inflation target, even at the expense of some short - term output volatility. single decision - maker or committee? in the new zealand central bank, all important decisions are vested in the governor, not in the monetary policy committee or in the board, even though we have both. we are by no means unique in this structure - laws in both canada and israel vest similar powers in the governor. but the pattern is unusual internationally. there are clearly advantages and disadvantages in all decision - making structures. when lars svensson conducted a review of the new zealand monetary policy framework for the new zealand government last year, he recommended moving from the present structure to one where monetary policy decisions are made by an internal committee of five, chaired by the governor. interestingly, the i was sufficiently new in the central bank, and sufficiently naive, to assume that it could be achieved, and did not hesitate to sign the policy targets agreement. underlying inflation peaked at 2. 4 per cent in the year to december 1996. lars svensson, independent review of the operation of monetary policy in new zealand : report to the minister of finance, february 2001. new zealand treasury, the non - executive directors of the reserve bank, and most of my colleagues argued against changing the structure in this regard. and the government also decided not to change the decision - making structure, after consultation with other political parties in parliament. the arguments in favour of having a single decision - maker related essentially to accountability and communications. the legislation under which the bank currently operates was passed into law during the late eighties, when there was a heavy emphasis on improving the quality of public sector administration. devolving more authority to public sector chief executives, and holding them responsible for their outputs, was central to that approach. so when i expressed surprise to the minister who was responsible for the reserve bank legislation that the bill envisaged the policy targets agreement being between the minister and the governor, not between the minister and the bank, he explained nonchalantly that " we can't fire the

ueda kazuo : the bank's semiannual report on currency and monetary control statement by mr ueda kazuo, governor of the bank of japan, before the committee on financial affairs, house of councillors, tokyo, 17 november 2023. * * * introduction the bank of japan submits to the diet its semiannual report on currency and monetary control every june and december. i am pleased to have this opportunity today to talk about recent economic and financial developments and about the bank's conduct of monetary policy. i. economic and financial developments i will first explain recent economic and financial developments. japan's economy has recovered moderately. exports and industrial production have been more or less flat, supported by a waning of the effects of supply - side constraints. corporate profits have been at high levels on the whole, and business sentiment has improved moderately. in this situation, business fixed investment has increased moderately. the employment and income situation has improved moderately. private consumption has increased steadily at a moderate pace, despite being affected by price rises. with regard to the outlook, japan's economy is likely to continue recovering moderately, supported by the materialization of pent - up demand, as well as by factors such as accommodative financial conditions and the government's economic measures, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies. the year - on - year rate of increase in the consumer price index ( cpi ) for all items excluding fresh food is slower than a while ago, mainly due to the effects of pushing down energy prices from the government's economic measures, but it has been in the range of 2. 5 - 3. 0 percent recently owing to the effects of a pass - through to consumer prices of cost increases led by the past rise in import prices. regarding the outlook, it is likely to be above 2 percent through fiscal 2024 and then decelerate in fiscal 2025. meanwhile, through fiscal 2025, the bank expects that underlying cpi inflation will increase gradually toward achieving the price stability target of 2 percent. concerning risks to the outlook, there are extremely high uncertainties surrounding japan's economic activity and prices, including developments in overseas economic activity and prices, developments in commodity prices, and domestic firms'wage - and price - setting behavior. under these circumstances, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on japan '