The recovery in the housing market should also be closely monitored, since there is some uncertainty whether the recovery in the number of mortgage applications will be solid amid higher levels of mortgage interest rates and stringent lending attitudes toward first-time buyers.
•  The performance of the European economy: the euro area economy has bottomed out and shows signs of a moderate pick-up in recent months. Japan’s exports to Europe have also begun to increase. However, the banking sector within the euro area remains fragmented, and thus countries in the area still have lending interest rate differentials.