Beyond the short term the prudent assessment of assets is beneficial to the financing of customers, especially if coupled with action by the banks to increase their ability to resist and  BIS central bankers’ speeches  5  react to external shocks.
On the other hand, there is also a risk that the rate of inflation might decline due, for example, to a decline in medium- to long-term inflation expectations. II. Conduct of monetary policy  The Bank recognizes that Japan’s economy is faced with a critical challenge of overcoming deflation and returning to a sustainable growth path with price stability.