Masu details Japan's economic activity and monetary policy
Bank of Japan Policy Board Member Kazuyuki Masu delivered a speech on economic activity, prices, and monetary policy in Japan on February 6, 2026. The address was given at a meeting with local leaders in Ehime.
Japan's economic landscape
Policy Board Member Kazuyuki Masu provided an in-depth assessment of Japan's current economic conditions, highlighting a gradual recovery supported by robust domestic demand and a rebound in inbound tourism.
He noted that corporate profits remain at high levels, fostering a positive cycle of investment and wage growth.
While global economic uncertainties persist, particularly concerning commodity prices and geopolitical risks, Japan's economy has demonstrated resilience.
Masu emphasized that household consumption, though showing some fluctuations, is expected to strengthen further as real wages begin to increase.
The labor market continues to tighten, with unemployment rates remaining low and job availability improving across various sectors.
Export performance, while influenced by global trade dynamics, has shown signs of stabilization, contributing to overall economic momentum.
Masu also touched upon the regional economic disparities, acknowledging the varying pace of recovery across different prefectures and the specific challenges faced by local businesses in Ehime.
Navigating price trends and policy goals
Masu addressed the evolving price dynamics in Japan, reiterating the Bank of Japan's commitment to achieving its 2 percent price stability target in a sustainable and stable manner.
He observed that consumer price inflation, excluding fresh food, has shown signs of moderating but remains influenced by past cost-push factors.
The Board Member stressed the importance of a virtuous cycle between wages and prices to ensure that inflation expectations become firmly anchored at the target level.
He discussed the challenges posed by imported inflation and the need to monitor its second-round effects.
Masu also outlined the Bank's current monetary policy framework, emphasizing its flexibility to respond to economic and price developments.
He underscored that the Bank will continue to carefully assess the underlying inflation trend and the outlook for economic activity to guide its future policy decisions.
A delicate balancing act
Achieving sustained 2 percent inflation in Japan remains a complex endeavor, requiring careful navigation of both domestic and global economic forces.
While recent data offers encouraging signs, the Bank of Japan must maintain vigilance to avoid premature policy shifts that could derail progress.
The path to normalization is fraught with uncertainties, demanding a flexible and data-dependent approach to ensure long-term stability without stifling nascent growth.