Kazuo Ueda: Japan's economy and monetary policy

Speech by Mr Kazuo Ueda, Governor of the Bank of Japan, at a meeting with business leaders, Osaka, 25 September 2023. 

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

Introduction

It is my great pleasure to have the opportunity today to exchange views with a distinguished gathering of business leaders in the Kansai region. I would like to take this chance to express my sincerest gratitude for your cooperation with the activities of the Bank of Japan's branches in Osaka, Kobe, and Kyoto. This is the first time in 20 years, since I was a member of the Bank's Policy Board in 2003, that I have had this kind of chance to meet with those of you in the Kansai business community. I recall that it was very stimulating to exchange views with the business community, and I look forward to hearing your candid opinions today as well.

Before hearing from you, I would like to talk about developments in Japan's economic activity and prices and explain the Bank's thinking on the conduct of monetary policy.

I. Japan's Economic Activity

Current Situation of Economic Activity

Let me start by talking about the current situation of economic activity in Japan. Japan's economy has recovered moderately, with the materialization of pent-up demand, i.e., demand that had been suppressed during the pandemic, and a waning of supply-side constraints (Chart 1).