Japan’s long-term interest rates have generally been flat in spite of a rise in overseas long-term interest rates reflecting speculation about the direction of U.S. monetary policy, and have recently been contained at a level of 0.7–0.8 percent, below the historical average.
Meanwhile, it can be said that inflation expectations have been on a rising trend on the whole, as evidenced (1) by the rise in the diffusion index for output prices in the June 2013 Tankan as well as the rise in the inflation expectations of firms, households, and economists, and (2) by the upturn in market-related indicators following a halt in their decline.