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About RIKEN

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RIKEN, a National Research and Development Agency, is Japan's largest comprehensive research institution renowned for high-quality research in a diverse range of scientific disciplines. Founded in 1917, initially as a private research foundation, RIKEN has grown rapidly in size and scope, today encompassing a network of world-class research centers and institutes across Japan.

The pages below offer an overview of RIKEN's mission, its management structure and history, as well as information on RIKEN's campuses and offices, its budget and personnel and its governance. We also have a video in our YouTube channel that introduces the institute .

• October 27, 2021 Professor Motoko Kotani, Executive Vice President for Research at Tohoku University, has been elected as President-Elect of the International Science Council (ISC).

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Overseas Branch Offices

The JST overseas offices are strategically located to capture the latest science and technology trends in their respective regions, actively promote the global activities of JST-funded Japanese researchers and leverage global networks to enhance and internationalize Japan's S&T.

Paris Office

We are JST's first-established overseas office, responsible for a wide range of countries within Europe and Africa. We negotiate and coordinate with relevant organizations and support the growth of JST's European operations, where science cooperation is often multi-layered and complex. We also play a vital role in transmitting local information back to JST headquarters, and are actively expanding our network of related organizations in order to improve Japan's S&T presence in Europe.

Beijing Office

The Beijing office communicates with Chinese government agencies in the coordination of international joint research programs, and supports activities such as the Japan-China University Fair & Forum and "Japan Window" - a website and public social media account providing information about Japan in Chinese language. We cooperate to hold the China-Japan Science and Technology Forum, and work to enhance JST's presence by participating in central and local government events.

Washington D.C. Office

At the Washington, DC Office our mission is to strengthen scientific cooperation between JST and our counterpart organizations, between JST and local scientists and researchers, as well as to study and analyze STI policies and R&D trends in the US. The office has also helped support various scientific collaborative arrangements with other countries in the Americas.

Singapore Office

South and Southeast Asia, home to more than 2 billion people, have achieved remarkable growth in recent years. Located among areas of diverse culture and history, the Singapore office strives to connect Japanese universities, research institutes and companies with these areas for the promotion of JST's operations in Asia. We are actively promoting student exchange program Sakura Science in addition to collaborative research programs offered by JST including e-ASIA, SATREPS, and CHIRP.

India Liaison Office

The India Liaison Office supports JST's Japan-India Collaboration Hubs for International Research Program (CHIRP), the Sakura Science Plan, SATREPS and other international cooperation projects with India. We build scientific networks, expand JST's presence, and investigate local science and technology trends. We are working to become a nexus of exchange between universities, research institutes and companies in Japan and India/South Asia.

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JRI Singapore

Japan Research Institute, Limited is a leading global technology company. The company headquarter is in Tokyo, Japan, including branches/subsidiaries locating in New York, London, and Shanghai.

The Japan Research Institute Limited, Singapore  (JRIS) was established in 1996 and grown to  diverse workforce of over 250 talents. As the APAC headquarter, our business objective is to provide comprehensive and highly value-added information services through the coordinated application of it's 3 functions i.e. information systems, consulting and IT strategic planning. Our commitment to environmental sustainability efforts were recognized, and in the year 2000, we acquired ISO14000 environmental management systems certification. In 2003, The Japan Research Institute became a wholly owned subsidiary of SMBC Group, which owns several different businesses ranging from bank to securities companies.

As a systems integrator, JRI offers services in IT strategic planning, implementation and outsourcing to a broad range of industries and activities to SMBC Group companies.

Our main client is Sumitomo Mitsui Banking Corporation (SMBC), one of the top 3 large mega banks in Japan. JRIS provides comprehensive IT support and functions to their APAC and East Asia branches and subsidiaries.

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The services provided by JRIS  include;

• IT system planning (for Application, Infrastructure, Security and Operation)
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Being the IT enabler of SMBC Group, our roles and responsibilities are becoming increasingly important as we play a significant part in the digital transformation journey.  Our vision is to position ourselves as a Technology Company leading the SMBC Group through IT . 

We are committed to achieving this through IT transformation, creating new services and investing in growing a talented workforce.

Copyright© The Japan Research Institute Limited. JRI Singapore is a member of Sumitomo Mitsui Financial Group

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Executive Vice President

Yuri OKINA, Dr.

Chairperson, The Japan Research Institute, Limited

PUBLICATIONS

OPINION PAPER

Is the Ratio of Burden and Benefits Fair for Households Raising Children? - An International Comparative Analysis of Income and Rates of Economic Burden for Employed Households- by Yuri Okina

Toward a Society in Which Establishing a Startup Is a Readily Available Choice by Yutaka Matsuo, Shinichi Takamiya, Shinji Odashima, Komei Fukushima, Florence Neo

Changes in National Debt as a Result of the COVID-19 Pandemic - An International Comparative Perspective - by Yuri Okina

The Feared Acceleration of Decline in Japan's Birthrate Due to COVID-19 by Noriko Tsuya, Fumio Ohtake, Shintaro Yamaguchi, Shiro Yamasaki, Sawako Shirahase

Public Acceptance of an Increase in the Burden of Medical Expenses for the Elderly - Considering the Issues based on the Results of a Deliberative Survey (2)- by Yuri Okina

Characteristics and Issues of Japan's Response to COVID-19 -An International Comparison by Yuri Okina

The Road to Realization of a Carbon-Free Society by Takeo Kikkawa, Hisahide Okuda, Toshihiro Matsumura, Keisuke Sadamori, David Lowe

Why Did Sweden Choose Not to Lock Down?- Constitutional Provisions and National Character Are the Background Factors - by Yuri Okina, Pereric Högberg, Ayako Miyakawa

Responses to COVID-19: Considering the Evidence -How Should We Prepare for a Second Wave? - byMitsuyoshi Urashima, Tai Takahashi, Yuri Okina (Moderator)

Towards a Society in Which Dementia Sufferers Can Live Their Lives as They Wish by Takeshi Iwatsubo, Pereric Högberg, Kohei Komamura, Tomoaki Maekawa, Tadamichi Shimogawara

How Should We Understand the US-China Confrontation? by Satoshi Machidori, Hiroshi Nakanishi, Shin Kawashima, Masahiko Hosokawa, Martin Wolf

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Poisoning the Pacific

Apocalypse Laos: The Devastating Legacy of the “Secret War”

Gone for Good? Hong Kong’s Dream of “Genuine” Elections…

Disaster Capitalism or the Green New Deal: COVID-19 and…

Japan signals a ‘sense of crisis’ over Taiwan — this…

The American Empire Project

China alone, the covid-19 pandemic complicates japan-china relations: will this benefit asean, modern monetary theory and the case of japan, two worlds collide: common law norms in the service of a national security regime.

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The Japan Economic Research Institute (JERI) was established in 1946, during the chaotic postwar period when Japan’s future was still uncertain. Rather than focusing on the nation’s immediate problems, Kamekichi Takahashi, as JERI’s founder, was determined to study the fundamental questions that concerned the Japanese economy. This has been remained the institute’s objective over the years, as former Chairman Dr. Osamu Shimomura and other researchers have expanded its activities in collaboration with Japan’s economic and academic communities. In the coming years, JERI will continue to devote itself to the betterment of the Japanese economy and the autonomy and sustained development of its regional communities.

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A delegation from the Netherlands on a medical AI innovation mission visited NII

On May 28, a delegation of 20 members from the Netherlands visited the National Institute of Informatics (NII) to investigate initiatives related to medical AI during their visit to Japan.

The delegation, supported by the Dutch government, is composed of representatives from companies, universities, and research institutions.

Deputy Director Akiko Aizawa provided an overview of NII and introduced the SIP project, and Professor Kensaku Mori, the director of the Medical Big Data Research Center, explained the cloud infrastructure for medical big data. Additionally, Professor Koichi Takeda, the deputy director of the Large Language Model Research and Development Center, presented current research on large-scale language models.

From the Netherlands, they introduced initiatives for AI-driven innovation, the realization of medical data spaces, and how generative AI is assisting healthcare professionals.They also had lively discussions and exchanges of opinions on NII's initiatives and numerous questions about medical AI in Japan.

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NRI and Eisai Form Business Alliance to Enhance Brain Health Initiatives

May 28, 2024

Nomura Research Institute, Ltd.

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Tokyo, May 28, 2024 - Nomura Research Institute, Ltd. has entered a business alliance with Eisai Co., Ltd. to support the introduction of Eisai's brain health check tool for corporate use. The business alliance agreement was signed on March 27, 2024.

Considering the Dementia Basic Law 1 enacted in June 2023, there has been a growing societal interest in Japan in maintaining and enhancing cognitive function and brain health. This trend is mirrored in corporate environments, where understanding the brain health status of individuals is becoming crucial in various contexts, such as service provision to customers and employee performance.

Particularly, when elderly customers engage in purchasing financial products like investment trusts or insurance, financial institutions must ensure these customers fully comprehend the products. Consequently, the need to assess and consider customers' cognitive functions to accurately understand their grasp of product explanations is expected to rise.

To address this need, NRI is partnering with Eisai to integrate and promote the use of Eisai's digital brain health check tool, "NouKNOW® 2 ," launched in 2020. This collaboration aims to elevate interest in brain health and support the resolution of various corporate-related challenges for both customers and employees.

The Dementia Basic Law, enacted in June 2023, is Japanese legislation aimed at promoting comprehensive measures for the prevention, early detection, and management of dementia, ensuring support and improved quality of life for affected individuals and their families.

NouKNOW (non-medical device) is a tool that uses a simple card test using a PC, tablet, or smartphone device to perform tests evaluating psychomotor function, attention, learning and memory, and working memory. For more information about NouKNOW, please visit https://nouknow.jp/ (Japanese)

Inquiries about this news release:

Lawrence Hale Sterling, Kayano Umezawa Corporate Communications Department Nomura Research Institute, Ltd.

TEL：+81-3-5877-7100 E-mail： [email protected]

Inquiries about this service:

Yusuke Takeuchi, Takuma Narasaki Financial Systems Solution Business Department I Shigeru Matsuo, Yusuke Kinoshita Digital Insurance Planning Department Nomura Research Institute, Ltd.

E-mail： [email protected]

What's New

May 16, 2024

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NRI achieves new AWS Generative AI Competency

In a drastically changing world, will such a strategy be sufficient?

2020/5/26 The following is from an article by Taishi Sugiyama, Senior Research Fellow at the Canon Institute for Global Studies, titled " Energy is a top priority for security, " which appeared in today's Sankei Shimbun's "Sound Arguments." This article is a must-read not only for Japanese citizens but also for people around the world. The emphasis in the text, except for the headline, is mine.  It announced the government's "clean energy strategy" interim reorganization. Although it became "de-Russia before decarbonization" following the Ukrainian War, it is supposed to make a government-led decarbonization investment at a massive cost. In a drastically changing world, will such a strategy be sufficient?

The annual cost burden of 15 trillion yen　 Initially, the "Clean Energy Strategy" was conceived at the behest of Prime Minister Fumio Kishida to promote decarbonization investments. However, Russia's invasion of Ukraine has increased the importance of security, and the interim report has two chapters: one on energy security and the other on decarbonization.　 However, security and decarbonization have yet to be reconciled. It is simply inconsistent. Energy security includes the prevention of supply disruptions and the provision of affordable energy. If so, there is a fundamental trade-off (incompatible relationship) with costly decarbonization, but that awareness is weak. The strategy requires an annual investment of 15 trillion yen. While this may sound like an investment, the public bears the burden of funding it. The public already pays 2.4 trillion yen per year in renewable energy levies alone. The Clean Energy Strategy includes items that are likely to increase costs enormously compared to existing technologies, such as the introduction of more renewable energies, electric vehicles, and the use of hydrogen. To what extent will the burden on the public increase? How much more will the burden on the public increase?　 However, the strategy also includes items contributing to economic growth while contributing to financial security, such as investments in storage battery factories, semiconductor factories, and data centers. With governments worldwide competing to lure new industries, Japan has no choice but to do the same.　 The strategy is expected to be finalized by the end of the year.  Still, its contents should be carefully scrutinized and limited to items contributing to economic growth to avoid making Japan a high-cost state. In this context, "de-Russia followed by decarbonization" is a naive security view.  We should restructure it based on a careful analysis of the current situation. Let me raise two points of contention.　

The new Cold War has set back decarbonization.　 From the 1992 "Earth Summit," global environmental issues came to international attention. The United Nations Framework Convention on Climate Change was also agreed upon. It is no coincidence that this coincided with the end of the US-Soviet Cold War due to the collapse of the Soviet Union in 1991. The ideological confrontation between East and West ended, and Francis Fukuyama proclaimed the "end of history" with the triumph of democracy. With the romantic exuberance that "the entire world will converge on Western-style democracy and peace will be achieved," global environmental issues became a significant focus of attention as problems to be solved through cooperation on a worldwide scale.　 However, the utopia did not materialize. Instead of becoming a democracy, as the West had hoped, China's growing economy became increasingly autocratic, and it began to vie for global hegemony. In turmoil after its failed attempts at rapid democratization, Russia reverted to an authoritarian state. It continued to engage in armed conflicts in neighboring regions, including the annexation of Crimea, and it continued to have strained relations with Western countries. Finally, the war in Ukraine was the decisive factor in the deterioration of relations.　 It is now clear that a new Cold War has begun, and the premise on which the global warming issue is based has fundamentally changed. There is no longer any hope for a global cooperative solution. And countries led by Europe are scrambling to increase the production and procurement of fossil fuels. The developed countries have not yet dropped their "decarbonization" signs, but their priorities will significantly decline.　

Next to de-Russia, then de-China What is next after Russia? Senator Marco Rubio, a leading U.S. Republican, warns. "Even now, with the war in Ukraine, I'm looking at China. It is a real problem for the United States. The threat from China is a thousand times greater than Russia. It has a much larger economy and a superior military. Already, U.S. companies have become lobbyists for various Chinese government positions in the name of business priorities."　 Senator Tom Cotton, D-N.Y., said the U.S. should pursue a de-Russian and de-Chinese policy simultaneously.   "We should make sure that China does not use force against Taiwan because it thinks it has an economic advantage over the United States. Instead, we should strategically separate the U.S. economy from the Chinese economy. In particular, important and strategic industries such as semiconductors and rare piles of earth need to start now."　 Europe's heavy dependence on Russian energy, especially natural gas, made it vulnerable and made Russia belligerent. The price for this was a devastating war in Ukraine.　 In turn, the mass introduction of solar panels and electric cars will make us dependent on the Chinese industry, especially in crucial mineral industries such as silicon and rare piles of earth. In addition, the huge cost burden of decarbonization will hurt Japan's manufacturing industry and damage its national strength.　 Japan must refrain from creating vulnerabilities through its decarbonization policy and give China an opening to take advantage of it. We should reconsider it immediately.

2024/5/25 in Kyoto

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Forward Guidance and Monetary Policy Communications: Use Your Words and Connect the Dots

I thank Governor Ueda, the Bank of Japan, and its Institute for Monetary and Economic Studies for inviting me to participate on this panel. In the brief time allotted for my prepared remarks, I will discuss forward guidance. My basic point will be that the effectiveness of forward guidance as a policy tool in extraordinary times can be enhanced by improving monetary policy communications in normal times. Two phrases you often hear in real life are “use your words” and “connect the dots.” In my view, both should be applied to the FOMC’s monetary policy communications. Of course, the views I will present as a panelist will be my own and not necessarily those of the Federal Reserve System or of my colleagues on the Federal Open Market Committee (FOMC).

Forward Guidance as a Policy Tool

In extraordinary times, in particular, when the policy rate has been lowered to its effective lower bound, theory suggests that explicit forward guidance about the future path of policy can be used as a policy tool and not just for the purpose of transparency and communications. It has the potential to increase the current degree of monetary policy accommodation by influencing the public’s expectations. By reducing uncertainty about the future path of policy, forward guidance can help lower interest rates by reducing the premiums investors demand to compensate them for interest-rate uncertainty. In addition, in theory, if the central bank indicates that the future path of short-term interest rates will be held lower and for longer than would be consistent with the central bank’s past behavior, this can put downward pressure on longer-term interest rates, thereby adding accommodation. It has the potential to spur current economic activity because if people believe that the central bank is committed to keeping interest rates very low, they will expect higher economic activity and higher inflation in the future and that will induce them to make investments in capital and labor today. Note, though, that for forward guidance to have this effect, the public must believe that the central bank is committed to setting policy differently than it has in the past. If the public doesn’t understand this but, instead, believes that the central bank is behaving as usual, it could misinterpret a very low policy rate as suggesting a gloomier outlook, and this misinterpretation would work to depress current activity – the exact opposite of the intended effect. 1

The Fed, along with other central banks, used forward guidance as a policy tool during the global financial crisis and during the pandemic. 2 As the FOMC gained experience, the form of its forward guidance during the global financial crisis changed over time, from qualitative guidance giving a qualitative characterization of the length of time economic conditions would warrant keeping the policy rate exceptionally low, to calendar-date guidance, to state-contingent guidance giving thresholds for the unemployment rate and inflation that would need to be met before moving off of the effective lower bound on the policy rate. 3 In the pandemic, the FOMC used state-contingent forward guidance, indicating that it expected to keep the funds rate target at 0 to 1/4 percent until the economy had reached maximum employment, and inflation had risen to 2 percent and was on track to moderately exceed 2 percent for some time. It put this guidance in place in September 2020, after the August release of the results of the FOMC’s framework review and revised long-term strategy statement. And it kept this guidance in place until December 2021, when PCE inflation had been running over 3 percent since April 2021.

Challenges to Using Forward Guidance as a Policy Tool

Reviews undertaken after the global financial crisis suggest that forward guidance was, in general, a useful monetary policy tool, partly as a communications device and partly because it helped to support other unconventional actions taken by central banks. 4 But the reviews also suggest that forward guidance was challenging to design and estimates of the resultant reduction in long-term interest rates differ over studies. The changing nature of the forward guidance used during the global financial crisis and the formulation of forward guidance during the pandemic when inflation rose to unanticipated levels support the view that implementing the guidance is not an easy thing to do.

Two inherent difficulties come to mind. First, theory suggests that to be effective as a policy tool, forward guidance involves committing the policymaker to a future policy path that differs from one implied by the policymaker’s usual policy reaction function. In other words, it commits the policymaker to using a different reaction function. But policymakers are loath to make those types of commitments – time-inconsistency problems loom large. 5 Contingencies can be included in the guidance, but that tends to limit the commitment, thereby watering down the potential effectiveness. Also, it is not clear that market participants pay enough attention to the conditional nature of the guidance. If they do not, then a change in policy, even if implicit in the guidance, could lower the central bank’s credibility. Given the time-inconsistency problems, it is challenging for central banks to credibly commit to a policy path that differs from normal policy without a temporary change in the framework, e.g., price-level targeting. This suggests that explicit forward guidance about the rate path should be used judiciously and only in extraordinary times.

A second difficulty is that the effectiveness of forward guidance in extraordinary times depends on the public understanding that the policy path in the forward guidance is a deviation from normal behavior, which means the public needs to understand the policymakers’ normal reaction function, which conveys how policy normally reacts to changes in economic conditions, whether those changes were anticipated or not. It has been challenging to convey how policy is likely to respond conditional on how the economy evolves without implying that policy is pre-committed to a particular policy path regardless of how the economy actually evolves.

Enhancements to Monetary Policy Communications in Normal Times

The Fed has been enhancing its communications over time. Still, there are times when market participants’ policy expectations differ from the FOMC’s, which raises the question about the effectiveness of our communications in terms of their transparency and/or credibility. Market participants’ expectations of the path of policy can differ from policymakers’ expected path because market participants have a different economic outlook despite seeing the same data or because they don’t understand policymakers’ reaction function or don’t view it as credible. Similarly, research suggests that the public also doesn’t necessarily understand or pay attention to central bank communications, thus limiting the effectiveness of those communications. 6 But recent research using randomized trials suggests that the general public’s belief that the central bank will maintain price stability can be enhanced with effective policy communication. 7 To the extent that enhancements to policy communications strengthen the public’s understanding of the Fed’s reaction function in normal times, it would make explicit forward guidance more effective when it is used in extraordinary times. I will make two recommendations for FOMC communications: use your words and connect the dots.

(1) Use your words: The FOMC policy statements have become shorter over time, giving less information about the FOMC’s medium-run outlook and risks around that outlook, which form the basis of our policy decisions. While simpler is often seen as a virtue, it can also be a detriment, since policymaking has to be done in an uncertain world, one in which the economy is constantly being buffeted by shocks that can lead economic conditions to evolve differently than anticipated. 8 With short statements, each word takes on added significance. Short statements suffer from what I call a “Hotel California” problem: we are reluctant to change particular words because of the possible signal that doing so may send. Words “check in” but it is hard to get them to “check out” even when it is desirable. One could argue that the use of “transitory” to describe inflation stayed in the FOMC statement far too long, given economic conditions. 9 Short statements also make it harder for the public to see the linkage between economic developments and policy action or inaction. When members of the public don’t understand the rationale for policy decisions, it can leave them with the impression that policymakers are acting in a discretionary manner and that lessens credibility.

In my view, it would be preferable for policymakers to take control of the narrative by using more words to describe the current assessment of economic developments, how they have influenced the outlook, and the risks to that outlook. Putting somewhat less weight on the modal outlook and more on potential risks to the outlook would help the public understand that if certain risks are realized, policy may have to deviate from the previously communicated modal path. It would give market participants and the general public a better sense of the contingent, data-dependent nature of policymaking and would raise the central bank’s credibility in that a change in policy would be seen less as a breach of promise. Scenario analysis should also be incorporated as a standard part of communications. 10 This could be particularly useful in periods like today when the underlying structural elements of the economy may have changed.

(2) Connect the dots: My second suggestion is for the FOMC to connect the participants’ policy path dots and their economic projections in the Summary of Economic Projections (SEP). 11 In other words, the FOMC should publish the anonymized matrix of economic and policy projections so that market participants can see the linkage between each participant’s outlook and his or her view of appropriate monetary policy associated with that outlook. Currently, the variables in the SEP are not linked across participants, and the median paths provided don’t necessarily represent a coherent forecast. For example, there is no guarantee that someone projecting the median inflation path would necessarily be projecting the median output path. There is no way for the public to know whether a person low in the range of unemployment rate forecasts is high in the range of inflation projections. And two participants could project the same federal funds rate paths, but those paths could be associated with very different economic forecasts. If we were to connect the dots to the forecasts within the SEP, the public would get a better sense of each individual policymaker’s reaction function.

Of course, broader enhancements to communications should be considered, including reconsidering the formulation of a consensus forecast of the FOMC, providing more information on how the FOMC considers financial stability issues when setting monetary policy, the interplay between balance-sheet policy and interest-rate policy, and the use of simple monetary policy rules as benchmarks for explaining policy decisions. 12 Enhancements to communications would make monetary policy more effective in normal times and also improve the effectiveness of nonconventional policy tools, such as forward guidance, in extraordinary times. I expect that the FOMC will consider communications as part of its next monetary policy framework review, given the central role communications play in the implementation of monetary policy.

• See Woodford (2012). Return to 1
• These were not the Fed’s first experiences of providing some communication about future interest rates. The FOMC began releasing policy statements in 1994, and 2003 was the first time it included forward guidance on the expected future path of the policy rate. For a discussion of earlier episodes of very low interest rates in the U.S., see Carlson, Eggertsson, and Mertens (2008). Other central banks used forward guidance before the global financial crisis, including the Bank of Japan, which introduced forward guidance in April 1999, two months after lowering its policy rate to zero in the wake of deflation. See Committee on the Global Financial System (CGFS, BIS) (2019). Return to 2
• For a timeline of the forward guidance that the Fed used during the global financial crisis, see Mester (2018). Return to 3
• See Committee on the Global Financial System (CGFS, BIS) (2019). Return to 4
• Evans (2017) discusses the time-inconsistency problems inherent in what he calls Odyssean forward guidance, which involves commitment, in contrast to Delphic forward guidance, which central banks use in normal times. The literature has suggested different mechanisms for increasing the credibility of the commitment inherent in forward guidance, including temporarily increasing the inflation target, targeting nominal GDP instead of inflation, and targeting the price level instead of inflation. See the discussion of forward guidance and other policies at the zero lower bound in Woodford (2012). Return to 5
• See Knotek, et al. (2024). Return to 6
• In a study using randomized information treatments in the six largest euro area countries, Ehrmann, Georgarakos, and Kenny (2024) find that communicating information about the inflation target can increase the central bank’s credibility to maintain price stability over the medium term, even in periods in which inflation has risen. Return to 7
• I discuss uncertainty and monetary policymaking in Mester (2016). Return to 8
• “Transitory” was removed as a characterization of inflation in the FOMC’s December 2021 statement. Year-over-year PCE inflation had been running above 3 percent since April 2021. Return to 9
• I discussed this recommendation in Mester (2023). In his review of the Bank of England’s forecasting and communications, Bernanke (2024) suggests including analyses of alternative scenarios in both internal discussions and as part of communications to the public. Such alternative scenarios could illuminate salient risks to the outlook when economic conditions evolve differently than expected or the underlying structure of the economy differs from what is assumed in the models. Return to 10
• I discussed this recommendation in Mester (2018). Return to 11
• In 2012, the FOMC experimented with developing a forecast representing the consensus of the Committee. I discuss the benefits and challenges of formulating a consensus FOMC forecast in Mester (2016). Return to 12
• Bernanke, Ben S., “Forecasting for Monetary Policy Making and Communication at the Bank of England: A Review,” April 12, 2024.  ( https://www.bankofengland.co.uk/independent-evaluation-office/forecasting-for-monetary-policy-making-and-communication-at-the-bank-of-england-a-review/forecasting-for-monetary-policy-making-and-communication-at-the-bank-of-england-a-review )
• Carlson, Mark, Gauti Eggertsson, and Elmar Mertens, “2. Federal Reserve Experiences with Very Low Interest Rates: Lessons Learned,” memo to the FOMC authorized for public release, December 5, 2008. ( https://www.federalreserve.gov/monetarypolicy/files/fomc20081212memo02.pdf )
• Committee on the Global Financial System (CGFS), Bank for International Settlements (BIS), “Unconventional Monetary Policy Tools: A Cross-Country Analysis,” CGFS Papers No. 63, report prepared by a Working Group chaired by Simon M. Potter, Federal Reserve Bank of New York, and Frank Smets, European Central Bank, October 2019. ( https://www.bis.org/publ/cgfs63.pdf )
• Ehrmann, Michael, Dimitris Georgarakos, and Geoff Kenny, “Credibility Gains from Central Bank Communication with the Public,” January 2024, paper presented at the Federal Reserve Bank of Cleveland Conference: Central Bank Communications: Theory and Practice, May 18, 2024. (https://www.clevelandfed.org/events/2024/ev-20240513-central-bank-communications#agenda )
• Evans, Charles L. “The Future of Odyssean and Delphic Guidance,” speech at the European Central Bank Communications Conference: Communications Challenges for Policy Effectiveness, Accountability, and Reputation, Frankfurt, Germany, November 14, 2017. ( https://www.chicagofed.org/publications/speeches/2017/11-14-2017-future-odyssean-and-delphic-guidance-charles-evans-frankfurt-ecb ).
• Knotek II, Edward S., James Mitchell, Mathieu Pedemonte, and Taylor Shiroff, “The Effects of Interest Rate Increases on Consumers’ Inflation Expectations: The Roles of Informedness and Compliance,” Federal Reserve Bank of Cleveland Working Paper No. 24-01, January 2024. ( https://doi.org/10.26509/frbc-wp-202401 )
• Mester, Loretta J., “Acknowledging Uncertainty,” Shadow Open Market Committee Fall Meeting, New York, NY, October 7, 2016. ( https://www.clevelandfed.org/collections/speeches/2016/sp-20161007-acknowledging-uncertainty )
• Mester, Loretta J., “The Federal Reserve and Monetary Policy Communications,” The Tangri Lecture, Rutgers University, New Brunswick, NJ, January 17, 2018. ( https://www.clevelandfed.org/collections/speeches/2018/sp-20180117-federal-reserve-monetary-policy-communications )
• Mester, Loretta J., “Monetary Policy in Word and Deed,” Shadow Open Market Committee Fall Meeting, New York, NY, October 20, 2023. ( https://www.clevelandfed.org/collections/speeches/2023/sp-20231020-monetary-policy-in-word-and-deed )
• Woodford, Michael, “Methods of Policy Accommodation at the Interest-Rate Lower Bound,” Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, WY, 2012. ( https://www.kansascityfed.org/Jackson%20Hole/documents/6930/Woodford_JH2012.pdf )

Suggested Citation

Mester, Loretta J. 2024. “Forward Guidance and Monetary Policy Communications: Use Your Words and Connect the Dots.” Speech, The Bank of Japan-Institute for Monetary and Economic Studies Conference, Price Dynamics and Monetary Policy Challenges – Lessons Learned and Going Forward, Tokyo, Japan.

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April 2024 Consumer Price Index

Growth rate of services falls due to policy factors

• Japan's Economic Indicator

May 24, 2024

• Shotaro Kugo
• Kanako Nakamura

◆Japan’s April 2024 core CPI (excluding fresh food) recorded +2.2% y/y. New core-core CPI (excluding fresh food and energy) was at +2.4%. Both core CPI and new core-core CPI continue to show a reduction in y/y growth rate in comparison to the previous month. ◆Looking at the y/y change in core CPI in terms of goods and services in April 2024, the growth rate declined in comparison with the previous month for semi-durable goods, non-durables (excluding fresh food and energy), and services. On the other hand, the growth rate rose for durable consumer goods in comparison to the previous month. The price of energy saw a return to a positive growth rate. ◆As for the future of Japan’s new core-core CPI (excluding fresh food and energy), growth of +2.2% y/y is expected in both FY2024 and FY2025. The sharp increase in import prices has already run its course, and the increase in intermediate input costs, which had been a major cause of rising prices, is gradually slowing. On the other hand, major wage hikes in this year’s labor negotiations will likely bring a strengthening around the middle of FY2024 of the tendency for companies to implement price pass-through in response to increased labor costs, and this is expected to lead to an increase in underlying inflation. We expect the virtuous cycle between wages and prices to become the norm in FY2025, with new core-core CPI maintaining stable growth of around +2%.

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