by realizing growth strategies and thereby bringing about changes in the economic structure, it has become vital to consider how monetary policy can contribute to these efforts. as japan's economy is in the process of recovering from the downturn caused by the impact of covid - 19, it is essential, for the time being, for the government and the bank to support sustaining firms'businesses and employment through their various measures. however, there could be cases where less productive businesses continue to operate and even inefficient firms that would otherwise have shut down remain in business. this may induce side effects whereby japan's productivity growth is weighed down over the long term. therefore, i think it will become more important for society to move toward promoting such developments as digitalization and greater labor mobility, and for firms to allocate their capital to highly productive business areas based on sound growth strategies. even prior to the outbreak of covid - 19, the secular decline in the potential growth rate was a major issue for japan, which has been facing structural problems such as the declining and aging population. although japan's economy has suffered a serious blow from the pandemic, there has been growth in businesses compatible with the new lifestyle that takes into consideration infection prevention, and teleworking is rapidly becoming widespread. against this background, digitalization has gained momentum. from a medium - to long - term perspective, all of these factors are likely to act as a driving force that will shift japan's economy toward achieving a higher growth rate. for the time being, the bank needs to do its utmost to conduct monetary policy with a view to supporting financing, mainly of firms, and maintaining stability in financial markets. however, from a medium - to long - term perspective, it is also important for the bank to support from the financial side the efforts by society and firms to push forward with structural reforms and growth strategies. in doing so, it is of course essential that the bank maintain accommodative financial conditions, thereby continuing to provide a solid foundation on which firms can take on risks and pursue change. at the same time, i think it is also important to encourage firms'investment in growth areas, mainly through financial institutions'expertise in examining the creditworthiness of firms and through the market mechanism, so that the potential growth rate will rise accordingly. thank you for your attention. economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in fukushima ( via web

japan's september tankan ( short - term economic survey of enterprises in japan ) has been revised upward from the june survey, and the year - on - year rates of increase have been at relatively high levels, mainly in the communications, information services, and retail industries ( chart 3 ). the factors behind this are likely to be the continuing trend since before the outbreak of covid - 19 of enhancing business efficiency and undertaking labor - saving investment, as well as firms'active fixed investment in growth areas such as e - commerce and teleworking amid the prolonged impact of the pandemic. weakness can be seen in employment : the diffusion index for employment conditions showing a net " excessive " for both the manufacturing industry and the accommodations as well as eating and drinking services industry in the september tankan, a decline in the active job openings - to - applicants ratio, and a rise in the unemployment rate ( chart 4 ). moreover, with respect to wages, non - scheduled cash earnings have decreased, reflecting a decline in working hours. bonuses, which lag behind corporate profits by about half a year, are expected to be weak this winter. c. recent price developments let me elaborate on price developments in japan. the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food, or the core cpi, has recently decelerated, registering minus 0. 7 percent for october ( chart 5 ). factors contributing to the decline in the cpi include the past decline in crude oil prices, a downturn in charges for hotels and for package tours to overseas, a deceleration in the rate of increase in prices of food products that are sensitive to economic activity, and a decline in prices of clothing. contributing factors also include the decrease in hotel charges that reflects discounts offered under the " go to travel " campaign and the dissipation of the upward pressure on prices generated by the consumption tax hike in 2019. from a macroeconomic perspective, the output gap, which indicates the supply - demand balance, declined substantially in the apriljune quarter of 2020. subsequently, it is likely to head toward a pick - up, mainly for the manufacturing industry. however, the gap is expected to register a relatively large negative figure, with the impact of covid - 19 exerting downward pressure on working hours and the capital utilization rate in the nonmanufacturing industry ( chart 6 ). in these circumstances, medium - to long