Particular attention is warranted on developments in overseas economic activity and prices. As I said at the beginning, central banks in the United States and Europe have raised policy interest rates rapidly to contain inflation, and there is concern in the market over whether it is possible to contain inflation and maintain economic growth simultaneously.
With central banks continuing to make rapid policy interest rate hikes, there is a risk that global financial conditions will tighten further through adjustments in asset prices, fluctuations in foreign exchange markets, and capital outflows from emerging economies, and that this will eventually lead to overseas economies deviating downward from the baseline scenario.