First, the pace of improvement in the output gap will be greater than that envisaged in the April 2013 forecast point due to upward revisions on the economic growth forecast. Second, there will be the lagged impact of the yen’s further depreciation from November 2014.
Third, the pace of the increase in inflation expectations will also be greater than initially projected, once it resumes its rising trend. In other words, the forecasts for fiscal 2014 and 2015 reflect the Bank’s view that the underlying price developments will remain intact.