Minutes from the press conference following the financial and economic meeting held by Bank of Japan Board Member Takada in Tsu City, Mie Prefecture on July 3, 2025, documenting questions and answers regarding the current state of the regional economy, price trends, and monetary policy management.
Key Points
Current State and Challenges of Mie Prefecture's Economy
- Mie Prefecture's population is declining at a faster pace than the national average, recognized as an important challenge for the regional economy
- Manufacturing maintains 9th place nationally on a shipment basis, with transportation machinery and electronic components/devices particularly driving growth
- Sales volumes at department stores, supermarkets, and drugstores continue to increase recently, with automobile sales recovering after the effects of production stoppages have dissipated
- Small and medium enterprises report difficulties with price pass-through and wage increases, with many voices indicating only defensive wage increases
Direction of Monetary Policy Management
- Currently in a "temporary pause phase" for rate hikes, recognizing the situation allows for a gear shift again after a certain observation period
- Achievement of the price stability target is "imminent" but not yet fully accomplished
- While the expression in February was "approaching," the assessment has advanced one step based on wage increase trends in March
- Regarding the possibility of rate hikes within the year, emphasizes not speaking with preconceptions and responding according to circumstances
Impact of U.S. Economy and Tariff Policies
- Likens the impact of mutual tariff imposition to "planned service suspension," explaining the situation of lowering forecasts in advance
- Points out the need to comprehensively judge not only tariff impacts but also demand-supporting policies such as tax cuts and deregulation
- July is expected to see many changes including tariff negotiations and fiscal policies, necessitating close monitoring
- Strong uncertainty continues, unable to judge that the "mutual tariff typhoon" has passed
Government Bond Purchases and Market Consideration
- Policy to respond flexibly while judging government bond market trends and supply-demand conditions in each zone
- Emphasizes balance between predictability and flexibility, operating with consideration for market stability
- While the purchase ratio in the 10-25 year zone is 50%, intends to respond flexibly rather than rigidly
- Recognizes that while market price formation is fundamental, consideration for stability is also necessary
The article clarifies Board Member Takada's stance that while recognizing the structural challenges of Mie Prefecture's economy and high domestic and international uncertainties, there is a need to continue cautious monetary policy management, showing progress toward achieving the price stability target while maintaining an accommodative financial environment for the time being to assess the situation.