kazuo ueda : the bank's semiannual report on currency and monetary control statement by mr kazuo ueda, governor of the bank of japan, before the committee on financial affairs, house of representatives, tokyo, 10 april 2024. * * * introduction the bank of japan submits to the diet its semiannual report on currency and monetary control every june and december. i am pleased to have this opportunity today to talk about recent economic and financial developments and about the bank's conduct of monetary policy. i. economic and financial developments i will first explain recent economic and financial developments. japan's economy has recovered moderately, although some weakness has been seen in part. exports have been more or less flat. with corporate profits improving, business fixed investment has been on a moderate increasing trend. the employment and income situation has improved moderately. it is becoming increasingly likely that wages will continue to increase steadily this year, following the firm wage increase last year, reflecting this year's annual spring labor - management wage negotiations. private consumption has been resilient, although the impact of price rises and developments such as a decline in automobile sales due to a suspension of shipment at some automakers have been observed. with regard to the outlook, japan's economy is likely to continue recovering moderately, supported by factors such as the materialization of pent - up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies. the year - on - year rate of increase in the consumer price index ( cpi ) for all items excluding fresh food has been in the range of 2. 5 - 3. 0 percent recently, mainly on the back of the fact that, despite waning, the effects of a pass - through to consumer prices of cost increases led by the past rise in import prices have remained, and services prices have increased moderately. regarding the outlook, it is likely to be above 2 percent in fiscal 2024 and decelerate thereafter. meanwhile, toward the end of the projection period of the january 2024 outlook report ( outlook for economic activity and prices ), the bank projects that underlying cpi inflation will increase gradually toward achieving the price stability target of 2 percent. concerning risks to the outlook, there are extremely high uncertainties surrounding japan's economic activity and prices, including developments in overseas economic activity and prices, developments in commodity prices, and domestic firms'wage - and price - setting behavior. under

, clearing participants should also remain primarily responsible for any losses to pre - empt adverse risk management incentives on their side. fourth, given the role of ccp participants in absorbing at least the vast majority of default - related losses in central clearing, it may be appropriate to enhance their involvement in key ccp risk management decisions as well as improving transparency on ccps ’ key risk mitigants. indeed, this could increase stakeholder ownership of risk management outcomes and would be in line with the basic principle that responsibility should be aligned with control. initially, i would suggest that the financial industry comes together to assess whether individual ccps have already established effective practices that could form a starting point for potential regulatory action. conclusions let me conclude. we have come a long way since the g20 agreement to increase mandatory central clearing obligations. however, critical gaps remain in cross - border cooperative arrangements for global ccps as well as in coordination within the central clearing community. effective coordination among banks, ccps and public authorities is necessary to manage risks in central clearing. there are significant shortcomings in this area, which cut across the various issues for discussion at today ’ s conference. in order to improve coordination, we need to take action to find fair solutions for diverging interests and reduce knowledge gaps. to this end, both private and public sector stakeholders should contribute to developing an enhanced institutional setting for ongoing dialogue and coordination. in a few distinct areas, targeted regulatory action may also be needed. we can make significant progress if we take advantage of synergies of expertise and adopt a systemic approach, rather than focusing on defending individual interests. today ’ s conference offers the opportunity to better join forces along these lines. thank you very much for your attention. [ 1 ] i would like to thank corinna freund, ester tanai, fiona van echelpoel, klaus lober and simonetta rosati for their support in preparing this speech. [ 2 ] see bank for international settlements ( 2019 ), quarterly review : international banking and financial market developments, december. [ 3 ] in particular, in april 2015 the chairs of the major global standard - setting bodies ( fsb standing committee on supervisory and regulatory cooperation, fsb resolution steering group, basel committee on banking supervision, committee on payments and market infrastructures, international organization of securities commissions ) agreed on a joint work plan to promote ccp resilience, recovery planning and resolvability. for further background and an explanation of the