Mark Bouris declares Australia 'definitely in a recession' as Reserve Bank keeps interest rates on hold at 4.35 per cent

It is my pleasure to have the opportunity today to exchange views with leaders in administrative, economic, and financial areas in southern Hokkaido. I would like to take this chance to express my sincere gratitude for your cooperation with the activities of the Bank of Japan's Hakodate Branch. Before hearing from you, I will explain Japan's economic activity and prices, as well as the Bank's conduct of monetary policy. I. Economic Developments Please take a look at Chart 1. I will start by talking about Japan's economic developments. Japan's economy has recovered moderately, although some weakness has been seen in part. Looking back, the economy continued to grow at a relatively high rate through the first half of 2023, reflecting the normalization of economic activity following the COVID-19 pandemic. Subsequently, the growth rate temporarily turned negative, partly due to a suspension of production at some automakers, but the economy has remained on an improving trend. It is expected to keep growing at a pace above its potential growth rate. Let me move on to Chart 2. In the corporate sector, business sentiment has stayed at a favorable level and corporate profits have been at record-high levels. In this situation, business fixed investment plans in the JBOJ deputy governor Uchida says the Bank's interest rate can change if needed Our interest rate path will obviously change if, as a result of market volatility, our economic forecasts, view on risks and likelihood of achieving our projection change. • Japan is not in an environment where we would be behind the curve unless we hike rates at set pace. • We won't hike rates when markets are unstable. • Personally believe the US economy can achieve soft landing • See no big change to Japan, US economic fundamentals so market reaction to single US data appears too big. • Recent market moves are extremely volatile so watching impact of their moves on economy, prices with extreme vigilance, will respond appropriately in guiding policy. • Japan's real interest rate very low, monetary conditions very accomodative. post: DEPUTY GOVERNOR OF THE BANK OF JAPAN, UCHIDA, SEES NEED TO MAINTAIN FIRM EASING FOR NOW post: BOJ DEPUTY GOVERNOR UCHIDA SEES NO RATE HIKE DURING MARKET INSTABILITY post: KEEP EASING IN PLACE FOR THE TIME BEING