kikuo iwata : remarks at a symposium in honor of korekiyo takahashi remarks by mr kikuo iwata, deputy governor of the bank of japan, at a symposium in honor of korekiyo takahashi, tokyo, 27 october 2013. * * * introduction it is my great pleasure to speak at such a distinguished symposium. i would like to take this opportunity to express my sincere gratitude to the people of yamaguchi prefecture for your cooperation with the activities of the bank of japan, especially of our shimonoseki branch. i was invited to appear today at this symposium in honor of the eminent statesman korekiyo takahashi ( 1854 – 1936 ). today, japan ’ s monetary and fiscal policies are at a critical juncture with regard to overcoming the deflation that has lasted for nearly 15 years. it is indeed timely for us to look back on the great achievements of our predecessor, who faced and addressed policy challenges similar to those of today, notwithstanding the differing historical circumstances of his time. takahashi lived through a very turbulent period, and his life contained enough adventures for any number of episodes on the big screen or television. to give just a few examples, after leaving for the united states as a youth in the late 1860s, he endured a period of indentured servitude. later he became involved in developing mines in peru, but was forced to return to japan after the mine scheme was discovered to be a fraud and his financial resources were exhausted. these episodes show us that the first half of his life contained many challenges, but he remained a man of determination and liberal spirit. toward the end of his 30s, he was assigned to this very place, shimonoseki, as the first general manager of the bank ’ s west branch. it was at that time that he began his career as a banker as well as a financial administrator. in the second half of his life, he went on to assume a number of important roles – such as governor of the bank of japan, finance minister, and prime minister – and left a record of many historic accomplishments. here in shimonoseki, there are many reminders of japan ’ s long history. it likewise enjoys an important place in japanese economic history, having nurtured a great statesman like takahashi. takahashi economic policy as i mentioned at the start of my remarks, among takahashi ’ s many achievements we are particularly interested in a series of macroeconomic measures – called the takahashi economic

purchases by paying due attention to how a negative interest rate affects the dynamics of jgb markets. monetary policy going forward the bank will continue with “ qqe with a negative interest rate, ” aiming to achieve the price stability target of 2 percent, as long as necessary for maintaining that target in a stable manner. it will examine risks to economic activity and prices, and take additional easing measures in terms of three dimensions – quantity, quality, and a negative interest rate – if it is judged necessary for achieving the price stability target. it is no exaggeration that “ qqe with a negative interest rate ” is the most powerful monetary policy framework in the history of modern central banking. sometimes it is argued that the bank of japan is running out of ammunition for further monetary easing. frankly speaking, i feel uncomfortable with such an argument. if we judge that existing measures in the toolkit are not enough to achieve the goal, what we have to do is to devise new tools, rather than give up the goal. indeed, the constraint of “ zero lower bound ” of a nominal interest rate, which was believed to be impossible to conquer, has been almost overcome by the wisdom and practices of central banks, including those of the bank of japan. i am convinced that there is no limit to measures for monetary easing. the bank will continue to devote itself to innovation in monetary policy measures. the commitment by the bank to achieve the price stability target of 2 percent is firm and unshaken. given that the central bank is firmly committed to the price stability target and is taking necessary measures as appropriate, the goal will surely be achieved. let me conclude my speech by reiterating what i have repeatedly stated since i took the governorship of the bank of japan : the bank of japan will do whatever we can to achieve the price stability target of 2 percent. thank you. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches