Haruhiko Kuroda: The Bank of Japan's thinking on monetary policy - toward achieving the price stability target in a sustainable and stable manner

Opening remarks by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the Kisaragi-kai Meeting, Tokyo, 6 June 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is my great pleasure to have the opportunity today to speak at the Kisaragi-kai meeting.

The last time I was invited to this meeting was in March 2021. This was just after the Bank of Japan conducted the Assessment for Further Effective and Sustainable Monetary Easing to enhance the sustainability and nimbleness of monetary easing amid concern over the lingering impact of the novel coronavirus (COVID-19). With the global resumption of economic activity since then and Russia's invasion of Ukraine, price developments at home and abroad have changed significantly. In particular, inflation in Europe and the United States has accelerated at a much faster pace than many experts had expected, and the Federal Reserve and other central banks have been moving ahead with reducing monetary accommodation in earnest recently. Despite being lower than the respective indexes for Europe and the United States, Japan's consumer price index (CPI) for this April exceeded 2 percent on a year-on-year basis for the first time since summer 2008. Even in this situation, unlike central banks in Europe and the United States, the Bank has made clear its stance to persistently continue with aggressive monetary easing.

Today, I will talk about why the Bank considers it necessary to maintain monetary easing in Japan while making comparisons with the situation in Europe and the United States. In addition, as the Bank aims at achieving the price stability target of 2 percent in a sustainable and stable manner, I would like to explain my view on the path toward the achievement.