bank of japan ’ s november review of monetary and economic trends in japan bank of japan, communication, 26 / 11 / 97. japan ’ s economic growth is decelerating further. although corporate profits, employment and income conditions continue to improve moderately, weak household expenditures since april have gradually begun to affect production, and corporate sentiment is also weakening. with respect to final demand, public - sector investment has been decreasing, and housing investment has also dropped significantly. personal consumption has continued to be weak on the whole, although the impact of the consumption tax hike has gradually begun to subside. on the other hand, net exports have continued to increase and business fixed investment has been rising moderately against the background of the increase in corporate profits. excessive inventories are seen in some industries. owing to weak final demand and inventory adjustments, industrial production has recently declined somewhat. the pace of improvement in employment and income conditions has slowed somewhat. prices have remained stable on the whole, with the exception of wholesale prices which have declined somewhat. the growth of monetary aggregates has recently slowed. personal consumption has continued to be weak on the whole. outlays for travel have been increasing moderately, and there are some signs in the sales of goods which suggest that the impact of the consumption tax hike has gradually begun to subside. however, sales at department stores and supermarkets have been below the previous year ’ s level, while passenger car sales have fallen below the level recorded in the second half of fiscal 1996 when sales surged, and have not even recovered the levels recorded before then. among leading indicators of business fixed investment, machinery orders have continued on an increasing trend since early 1997 after having surged in the second half of 1996. recently, however, orders from non - manufacturing firms have been weak. construction floor area has followed a moderate recovery trend, albeit with some fluctuations. with respect to housing investment, housing starts in terms of the seasonally - adjusted annual rate declined in july to 1. 24 million, the lowest level since september 1985, following the surge in demand in the second half of 1996 ahead of the consumption tax hike. housing starts have since remained weak at around 1. 3 - 1. 35 million. regarding public - sector investment, the amount of public works contracted has followed a decreasing trend reflecting the restrained budget for fiscal 1997. against the background of steady overseas demand and the yen ’ s depreciation to date, real exports remained high in the third quarter 1997, although they decreased somewhat from the second quarter when

, depending on their type and maturity. it will be interesting, not least to a monetary policy - maker, listen to what the latest research has to say about these various channels. * * * finally, there is the issue of climate change. while governments and parliaments have the primary responsibility for climate policy, the ecb, within its mandate, also needs to promote these objectives. among other things, the ecb aims to expand its analytical capacity to incorporate climate issues in its economic models and to promote the measurement and disclosure of risks related to climate change, so that they can be taken into account in risk management, investment activities and monetary policy operations. at this conference, we will also hear a presentation on climate change and monetary policy. looking at the conference ’ s programme in its entirety, i have high expectations for the coming two days and look forward to hearing the conclusions of this event. a warm welcome once more on behalf of the bank of finland. let me wish you all a productive and enlightening conference. thank you. 1 paloviita, m., m. haavio, p. jalasjoki, j. kilponen, i. vanni ( 2020 ) : reading between the lines : using text analysis to estimate the loss function of the ecb. bank of finland research discussion paper 12 / 2020. 3 / 3 bis central bankers'speeches