When faced with increased stress in the money market over the past ten months, the Bank of Japan responded by providing ample liquidity or supplying longer-term funds earlier than usual. These operations, conducted within the normal operational modalities, enabled us to control short-term interest rates without serious difficulties. In short, I am reminded that financial market stability is essential for effective monetary policy.
The year-on-year rate of change in consumer prices (excluding fresh food) has been close to zero percent, while temporary factors such as the rise in rice prices have exerted upward pressure, and is likely to be around zero percent for the time being.