in japan ” and placed there as a summary of the overall assessment. second, the content related to overall risk assessment of economic activity in the second perspective should be moved to the last part of section ii. a. “ risks to economic activity. ” similarly, the content related to prices should be moved to the last part of section ii. b. “ risks to prices. ” the content related to the assessment of financial imbalances should remain in section iii, but it should be moved to a place after the description of the future conduct of monetary policy. i do not exclude the possibility of using alternative description styles. in any case, i believe that the bank should make greater efforts to promote an understanding among the public and market participants of its monetary policy and pursue more effective communication strategies. improving the writing style in official documents including the outlook report is one of the first steps toward achieving that goal. i will continue to work on this issue. that brings me to the end of my presentation. thank you very much indeed for your kind attention. bis central bankers ’ speeches chart 1 outlook for economic activity ( real gdp ) 4. 5 4. 0 3. 5 3. 0 2. 5 2. 0 1. 5 1. 0 0. 5 0. 0 - 0. 5 - 1. 0 - 1. 5 - 2. 0 - 2. 5 - 3. 0 - 3. 5 - 4. 0 y / y % chg. 2. 9 actual 1. 4 1. 2 1. 6 0. 2 fiscal year note : the circles in charts 1 and 2 indicate the median of the policy board members ’ forecasts. source : bank of japan. chart 2 outlook for prices ( cpi ) 4. 0 y / y % chg. 3. 4 3. 5 with the consumption tax hikes 3. 0 2. 6 without the consumption tax hikes 2. 5 2. 0 1. 5 1. 9 actual 1. 0 1. 4 0. 5 0. 7 0. 0 0. 0 - 0. 5 - 0. 2 - 1. 0 - 1. 5 - 2. 0 fiscal year source : bank of japan. bis central bankers ’ speeches chart 3 output gap % - 2 - 4 - 6 - 8 - 10 year 12 13 source : bank of japan. chart 4 real gdp and labor input y / y % chg. y / y % chg. projection labor input ( left scale ) real gdp ( right

in particular, as they are more susceptible to a decline in purchasing power. chart 8 shows developments in the terms of trade. there has been a deterioration in the terms of trade three times since 2013 : from 2013 to october 2014, from 2017 to may 2019, and from march 2021 onward. the current deterioration is distinctive in its severity and in the significant impact of the rise in import prices. moreover, unlike the situation in 2017 – 2019 — when a rise in 3 / 6 bis central bankers'speeches import prices of crude oil was the main cause of the deterioration in the terms of trade — import prices are currently rising for a broad range of goods, not only crude oil but also metal products and lumber, reflecting supply - side constraints. if raw material costs — which have been hovering at a high level — are not smoothly passed on to selling prices, this will increase the risk that firms will not fully distribute their profits in the form of fixed investment and wages. 4 the third point is the possible effects of macroeconomic policies across countries and regions, particularly how the course of u. s. monetary policy will influence asset markets and global financial markets. 5 policy rate hikes in the united states will affect not only the economy there but also emerging economies, which are still on their way to recovery from the pandemic, through changes in capital flows in global financial markets. there is also concern about the risk that adjustments in the chinese economy, such as in the real estate sector, will exert downward pressure on its growth rate and thereby adversely affect the world economy. alongside this, as i mentioned earlier, close and careful attention is warranted over possible effects that geopolitical risks, including those related to the recent situation surrounding ukraine, will have on commodity and grain prices, the world economy, and global financial markets. conduct of monetary policy based on the outlook for economic activity and prices that i have described, i will outline the bank ’ s current monetary policy and recent policy decisions. i would then like to express my opinion about the bank ’ s monetary policy conduct. overview of current monetary policy and recent policy decisions the bank conducts monetary policy under the framework of quantitative and qualitative monetary easing ( qqe ) with yield curve control, aiming to achieve the 2 percent price stability target. this current framework consists of three components : yield curve control, the purchase of risk assets, and the bank ’ s public commitment regarding the future conduct of monetary policy. in addition, the bank has taken