Bank's Monetary Policy Management and Japan's Growth Potential In this way, Japan's economy has been on a path suggesting that the 2 percent price stability target will be achieved as expected.
Changes in the Economy's Supply Capacity and Conduct of Monetary Policy I have mentioned factors associated with the expansion of the economy'ssupply capacity as the causes of the delay in growth in prices.
As moral hazard is one of the most important topics of discussion for monetary policy, financial system stability, and regulation and supervision, I will return to it toward the end of my speech.
The Conduct of Monetary Policy from a Medium- to Long-Term Perspective Next, I would like to take up the recent disruptions in global financial markets stemming from the subprime mortgage problem in the United States.
Inflation Expectations and the Conduct of Monetary Policy To put it simply, inflation expectations are people's outlook for prices, or their perception of future price developments.
Under the current framework for the conduct of monetary policy, the Bank examines financial imbalances-- from a longer-term perspective-- as a risk that will significantly affect economic activity and prices.
As outlined in the above discussion on monetary policy management, each member expressed strong concern about the negative impact of the rise in long-term interest rates on the economy.
Current monetary policy management As you all know, the Bank of Japan took successive monetary easing measures during February to March this year, and the March decision was a decisive one.
The Bank's Conduct of Monetary Policy Based on this thinking, the Bank has continued to implement the quantitative easing policy with the outstanding balance of current accounts held at the Bank as the main operating target.
Since the effects of the monetary policy conduct of other economies are subject to change depending on developments in economic activity and markets, it is important to make a comprehensive judgment without being influenced by temporary developments.
New Framework for the Conduct of Monetary Policy As the Japanese economy is heading toward normalization, we have altered the framework of monetary policy to support movement in that direction.
Conduct of Monetary Policy In the context of the price stability target, the Bank assesses the aforementioned economic and price situation from two perspectives and then outlines its thinking on the future conduct of monetary policy.
The decline in crude oil prices and the conduct of monetary policy Next, I would like to highlight two points regarding the Bank's future conduct of monetary policy and then conclude my remarks.
Based on these projections, the government would like the Bank to examine the basic framework for the conduct of monetary policy and to implement more effective monetary policy, in order to overcome deflation after the intensive adjustment period.
Overcoming Deflation and Conduct of Monetary Policy In order to put Japan's economy on a sustainable growth path and to extricate Japan from deflation, it is a prerequisite that private demand increases and prospects for long-term growth improve.
Considering such changes in the transmission channel of monetary policy, I am wondering whether and to what extent we need to alter our way of thinking on monetary policy management for the advanced countries or an international key currency country.
Closing Remarks Today, I have discussed the conditions of global financial markets and the world economy, the economic situation in Japan, and the conduct of monetary policy, and also presented some outlook for the coming year.
Over the past few years, our conferences focused on monetary policy issues, yielding important insights and suggestions for the conduct of monetary policy after the Global Financial Crisis.
Today, in wrapping up 2019, I would first like to take a look back at this year's economic developments at home and abroad and talk about the Bank of Japan's conduct of monetary policy.
Sharing and debating the experience of different countries and the results of such studies is crucially important in considering the management of monetary policy in the future.
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