I personally see the impact of the yen's depreciation and rising crude oil prices on economic activity and prices as significant and am closely monitoring their developments. In light of these, let me share what approach I think monetary policy should take. First, monetary policy should focus on the underlying trend in inflation and aim to keep it stable at around 2 percent.
As I mentioned earlier, the year-on-year rate of increase in the CPI when adjusted to measure the underlying trend has been at around 1.0 percent recently. From the perspective of achieving the 2 percent price stability target, I think it is premature to revise the direction of monetary policy toward tightening. To begin with, exchange rates are not directly controlled by monetary policy.