december 24, 2020 bank of japan response to covid - 19 and medium - to long - term challenges for japan's economy : with an eye on the post - covid - 19 era speech at the meeting of councillors of nippon keidanren ( japan business federation ) in tokyo kuroda haruhiko governor of the bank of japan ( english translation based on the japanese original ) introduction it is a great honor to have this opportunity to address such a distinguished gathering of business leaders in japan today. for eight years now, i have delivered a speech at this end - of - year meeting, and i can say that this year we have experienced enormous changes in the social and economic environment due to the shock of the novel coronavirus ( covid - 19 ). as we wrap up 2020, i would first like to take a look back at economic developments this year, mainly focusing on the impact of covid - 19, and talk about the outlook for economic activity and prices. then, i will explain the bank of japan's thinking behind its policy responses. in relation to the conduct of monetary policy, i will also touch on the conduct of the assessment for further effective and sustainable monetary easing, which the bank decided at the monetary policy meeting ( mpm ) held last week. lastly, i would like to talk about what is necessary in taking advantage of lessons to be learned from overcoming the current crisis for future growth - - that is, challenges regarding japan's economy as a whole that should be addressed when also looking ahead to the post - covid - 19 era from a medium - to long - term perspective. i. economic and price developments during the covid - 19 era and their outlook impact of covid - 19 on the economy let me start with a look back at economic developments this year, mainly focusing on the impact of covid - 19. covid - 19 started to spread from the beginning of the year and became a pandemic within a short period toward early spring ( chart 1 ). governments around the world took strict and wide - ranging public health measures in order to prevent the spread. under these circumstances, the global economy became depressed significantly. however, since the summer season, as public health measures have been eased, the global economy has picked up from that state of significant depression, as seen in the growth rates of each country turning positive on a quarter - on - quarter basis. similar developments have been observed in japan. the quarter - on - quarter gdp

richest countries. about three - quarters of the global fdi stock is currently located in developed countries and the vast majority of fdi funds invested worldwide comes from developed countries. at the same time, fdi patterns are changing most rapidly for developing and transition countries, where funds are concentrated in a handful of countries such as china or india. this is why we will also hear about the asian experience. interestingly enough, some of the motivations for investors ’ location decisions are not so different between developed and developing countries. factors such as access to large and fast - growing markets or the circumvention of trade barriers are equally relevant to the u. s. as they are to china or india. other factors are more specific to single regions. overall, i am confident that there will be a lot to learn for us – across countries and across regions – during the next two days. i wish all of us an interesting and successful conference.