Therefore, I will pay attention to whether the price-setting behavior of firms becomes even more active after overcoming the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike. The third point for attention is developments in exports. The environment surrounding exports is expected to gradually improve, as the global economy – mainly advanced economies – recovers.
On the other hand, structural factors, such as the shift of Japanese firms’ production sites to overseas, are likely to continue exerting downward pressure on exports. Moreover, there is uncertainty about the extent to which the past depreciation of the yen will boost export volume.