In a keynote speech at the G20 symposium in Tokyo, BoJ Governor Haruhiko Kuroda said Japan is “facing the most aged society in the world.” And he discussed the impacts of aging and declining population on macroeconomy, fiscal conditions and social security systems, and monetary policy and financial system.
On monetary policy market, Kuroda said “As a low interest rate environment persists and credit demands become stagnant amid declining population, banks might accelerate their search-for-yield activities such as expanding their exposures to overseas assets and increasing loans and investments to firms with higher credit risks. If that were the case, the entire financial system could become less stable. ”
