In light of these movements, let me share what approach I think monetary policy should take. First, monetary policy should focus on the underlying trend in inflation, aiming to keep it stable at around 2 percent.
As I mentioned earlier, although prices are currently rising, the reality is that it remains uncertain whether the price stability target can be achieved in a stable and sustainable manner, as neither rises in firms' growth expectations nor sustained increases in wages can be seen conclusively. 8  Second, exchange rates are not subject to direct control by monetary policy to begin with.