haruhiko kuroda : opening remarks opening remarks by mr haruhiko kuroda, governor of the bank of japan, at the 2021 boj - imes conference hosted by the institute for monetary and economic studies, bank of japan, 24 may 2021. * * * i. introduction it is my great pleasure to welcome you all to our boj - imes conference. this is the 26th conference, and for the first time in its history since 1983, the conference is being held online. on behalf of the conference organizers, i would like to thank you all for your participation. the theme of this year ’ s conference is “ adapting to the new normal : perspectives and policy challenges after the covid - 19 pandemic. ” more than a year has passed since the outbreak of the pandemic, during which time it has caused enormous loss and damage to people all over the world. finally, we are beginning to see the light at the end of this dark tunnel as effective vaccines are being rolled out. it is at this juncture that our conference poses the following questions : what will the so - called new normal look like that emerges after the pandemic? and, how are we going to adapt to this new normal? these questions are the central theme of the conference. as a starting point, i would like to provide some common ground for developing our discussions. specifically, i would like to focus on three issues : the economic perspectives, policy challenges, and the nature of the post - pandemic new normal. ii. economic perspectives a. uneven recession and recovery in considering the economic perspectives, let me begin by touching on the characteristics of the recession caused by the pandemic and of the following recovery. simply put, the most important feature of both the recession and the recovery is their unevenness. each recession is different, but this time, the difference in the severity of the downturn among industries, business types, and occupations has been particularly dramatic. people have changed their behavior under the pandemic and in response to the containment measures. demand for goods and services that require in - person contact has plummeted. these industries have taken a huge hit and their recovery has been slow. the unevenness of the recession and the ongoing recovery could reinforce three trends that have continued since around the global financial crisis of the late 2000s. the first trend is an increase in saving. against the backdrop of uncertainty over the course of the pandemic and recovery

bank of japan ’ s july report of recent economic and financial developments1 bank of japan, communication, 19 july 2000. * * * the bank ’ s view2 japan ’ s economy is recovering gradually, with corporate profits and business fixed investment continuing to increase. with regard to exogenous demand, net exports ( real exports minus real imports ) continue to follow a moderate upward trend due to steady developments in overseas economies, and public investment is picking up reflecting the progress in the implementation of the supplementary budget for fiscal 1999. as regards domestic private demand, business fixed investment is increasing. the recovery in private consumption continues to be weak as a whole through lack of notable improvements in employment and income conditions, although there are somewhat positive signs in some indicators. housing investment is mostly unchanged. reflecting such developments in final demand, industrial production is increasing. corporate profits and sentiment continue to improve, and the number of firms that take positive action, such as increasing the amount of fixed investment, is increasing, especially in high - growth sectors. income conditions of households still remain severe, but the decreases in the number of employees and in wages are slowing, while regular and overtime payments as well as new job offers are increasing in line with the recovery in corporate activities. as for the outlook, public investment is likely to start decreasing in the near future, but net exports are expected to continue increasing gradually, reflecting the expansion in overseas economies. in the corporate sector, firms still strongly feel that they have excess equipment and that they should reduce their debts to restore financial soundness. however, it is very likely that fixed investment in highgrowth sectors, including those related with information technology services, will increase as corporate profits continue to recover. moreover, an improvement in corporate profits will increase household income and this in turn is expected to boost private consumption. however, the pace of recovery in household income will be modest for the time being, since firms ’ perceptions of excess employment still persist, and thus significant changes have not been observed in their efforts to reduce personnel expenses. overall, the economy is likely to recover gradually led mainly by business fixed investment, unless there are major adverse external shocks. in addition, the favourable financial environment created partly by the bank ’ s monetary easing is expected to continue underpinning the economy. with regard to prices, import prices are decreasing slightly, reflecting a temporary decline in international commodity prices such as crude oil prices. domestic wholesale prices, notwithstanding the fall in prices of electric machinery, are unchanged mainly due to the rise