Thus, the Bank will monitor more closely future developments in domestic and overseas supply and demand conditions, as well as in the foreign exchange market. 5. In sum, private demand has firmed in a virtuous cycle as growth in production is accompanied by growth in incomes, supported partly by the yen’s depreciation which augmented corporate profits and net exports.
Thus, although economic growth will slow down temporarily in the first half of fiscal 1997 with the reversal in the stepped-up demand ahead of the rise in the consumption tax, chances are improving that economic recovery turns out to be sustainable.