Executives' Comments  Press Conferences   Chairman Tokura's Statements and Comments
at His Press Conference

April 18, 2022

Ongoing Yen Depreciation

It is desirable that exchange rates reflect economic fundamentals and move stably within a certain range. We cannot make sweeping judgements on whether rates are good or bad based on absolute levels, and interest rates should not be adjusted in response to exchange rate fluctuations.

Exit strategies have been talked about for some time, but just as the government and the Bank of Japan are striving towards sustainable inflation and wage increases, Japan currently finds itself in a very difficult position. It is premature to discuss what should be done about monetary policy.

Past yen appreciation provided an opportunity for Japanese companies to expand overseas and set up local production abroad, and even if the yen continues to depreciate, the impact for exporters will not be as positive as it was previously. At the same time, as raw material prices rise sharply, I understand that the additional burden of yen depreciation is causing short-term pain for many consumers and importers, especially SMEs.

It will take some time for the benefits of yen depreciation to emerge. For example, if exporters' business results improve, wage rises and increased consumption can be anticipated. Looking ahead to Expo 2025 Osaka, Kansai, overseas visitors will be attracted to Japan, and this boost to inbound tourism can be regarded as a tailwind.

Impact of High Resource and Food Prices

High resource and food prices stemming from the combination of yen depreciation and Russia's invasion of Ukraine have highlighted energy security and food security issues for Japan. Measures to address both these issues need to be taken from a medium- to long-term perspective. It is essential to develop policies on promoting renewable energy, restarting nuclear power plants once safety and peace of mind have been assured, improving the food self-sufficiency rate, and stably procuring energy and food.

Emergency Economic Measures

[In response to questions about the trigger provision and support for those in need related to emergency economic measures] Unfreezing the trigger provision to enable a temporary gasoline tax cut is being discussed as a measure to address high oil prices. Since it is difficult to restore tax rates to previous levels once they have been changed, I understand the government's resolute action to raise the gasoline subsidy for distributors. Regarding support for those in need, past measures have shown that it is not easy to ensure such assistance reaches those genuinely facing difficulties. As the government switches from measures for dealing with a pandemic to various policies for a time of endemic disease, it needs to firmly support the tourist industry and the service sector, and consider ways of energizing the economy.

Chinese Economy

Preliminary GDP estimates for the January-March quarter announced on April 18 gave a year-on-year increase of 4.8%, but indicators such as mining and manufacturing production, consumption, and the purchasing managers' index suggest that the pace of recovery is slowing. Eurasia Group, a US research organization, ranked the failure of China's zero-Covid policy as number one in its list of the top ten global risks for 2022. China is now facing exactly that problem. We will continue to monitor economic trends in China.

COVID-19 Vaccines

[In response to a question about a newly approved COVID-19 vaccine] I am delighted that approval procedures have been completed and a new vaccine has become available. Take-up of third vaccine doses has been slow, especially among young people. Availability of a different type of vaccine for people who have difficulty with mRNA shots will be a plus in advancing vaccination.

To raise the vaccination rate among young people, I hope that scientists will enable them to make decisions by carefully explaining matters such as after-effects of COVID-19 infection, the efficacy of vaccines in preventing infection for you and those around you, and side effects of vaccination.

New Types of Internships

During their time at university, I would like students to not only study, but also think about how their studies can be of use to society, and how they might lead to career advancement.

Enterprises should also provide practical opportunities to learn about society, companies, and workplaces, and need to facilitate high-quality internships accompanied by work experience. At today's meeting of the Industry-Academia Council on the Future of Recruitment and University Education, which comprises leaders from Keidanren and public and private universities, we categorized support for students' career planning into four types, two of which are positioned as internships offering work experience. We also decided that information on students gained through internships could be used once recruitment activities start, provided that standards are met. We will cooperate with the government to promote the widespread adoption of new types of internships.

Merger of Keidanren and Nikkeiren

Before Keidanren and Nikkeiren merged, the former had addressed a wide range of internal and external policy issues, while the latter had handled exclusively social security and labor matters.

Given that labor and social security matters had become more than stand-alone issues and related to a wide range of challenges, we unified the roles of the respective organizations to communicate our views more comprehensively and engage in various activities under the Keidanren banner.

Looking back over the last 20 years, I feel that this was a highly significant merger.