expectations, which plays a crucial role in monetary policy. furthermore, it is important to strengthen coordination of fiscal and monetary policies and thereby steadily implement a policy mix. as a member of the policy board of the bank, i will continue to do my utmost to achieve and maintain the price stability target. thank you. 1 the year - on - year rate of change in the cpi for all items less fresh food and energy for february 2022 was minus 1. 0 percent. 2 the number of confirmed cases also surged in japan from january 2022, when the omicron variant became prevalent. the risk of hospitalization seems to be lower for the omicron variant than for the delta variant. however, the number of severe cases peaked close to the 70 percent level seen in autumn 2021, and this brought the medical care system under strain in some regions. 3 there have been many reports that logistics disruptions will continue for at least the rest of the year. see, for example, japan external trade organization ( jetro ), “ kyokyu seiyaku, yuso no konran to kigyo no taio jokyo ”, 2022, www. jetro. go. jp / ext _ images / world / covid - 19 / info / logistics0217r. pdf. 4 it should be noted that foreign exchange rates do not have a substantial impact on the overall terms of trade because they affect both export and import prices on a yen basis. 5 in response to the globally heightened inflationary pressure, the number of central banks that decided on a policy rate hike for the october - december quarter of 2021 was 31, increasing from 23 for the july - september quarter. 6 presuming that the first passage time probability of a stochastic process obeys the wald distribution, the probability of inflation rates hitting a threshold before a time horizon is estimated, assuming a 2 percent threshold and measurement horizon of two years. for the estimation results for 1991 through 2012, see chart 9 in kataoka, g., “ economic activity, prices, and monetary policy in japan : speech at a meeting with business leaders in kanagawa, ” bank of japan, september 2018, www. boj. or. jp / en / announcements / press / koen _ 2018 / ko180921a. htm /. 6 / 6 bis central bankers'speeches

by combining domestic production with exports as well as with foreign direct investment, or local production overseas. indeed, overseas investment by japanese firms has been increasing, especially in asia. such a trend has spread from large manufacturing firms to nonmanufacturing ones, as well as small and medium - sized enterprises ( chart 14 ). nevertheless, the outstanding amount of japan ’ s foreign direct investment remains at a low level compared with that of other advanced countries ( chart 15 ). similarly, in terms of the profitability of foreign investment, which is the combination of portfolio investment and direct investment, japan falls a little behind countries such as the united states, partly because of its small share of direct investment, which has a high rate of return ( chart 16 ). huge potential demand exists in emerging economies, particularly asia, in the area of building core infrastructure for transportation systems, energy supply, and communication systems. according to the estimates of the asian development bank, such demand will amount to approximately 8 trillion u. s. dollars from 2010 to 2020 ( chart 17 ). there are ample business opportunities for japanese firms to make use of their globally recognized cuttingedge technologies and wealth of experience – such as upgrading metropolitan infrastructure and implementing environmental and energy - saving technologies, as well as deploying factory automation systems to address labor shortages and wage rises – that have been nurtured in japan over the years. it has become increasingly apparent that japanese firms in such sectors as retail, healthcare, and education, which have focused mainly on the domestic market, are able to formulate sweeping business strategies in large asian markets, where consumer demand is increasing briskly as these countries ’ middle - income populations continue to expand. bis central bankers ’ speeches responding to the aging population the second course is to respond to the rapidly aging population. the long average life expectancy of the japanese people implies that health, the condition most vital to well - being, is being fulfilled at a high level. having said that, it is necessary to adjust the economic structure and social infrastructure as the population continues to age. otherwise, it becomes difficult to maintain the current high quality of life. while this is sometimes misunderstood, the demographic change of population aging itself is not triggering the problem for japan ’ s economy ; the real issue is that japan ’ s economic structure and social infrastructure have not sufficiently caught up with such demographic changes. the aging of the population brings about various changes to the economy. first, it will become a downside factor for economic growth via the