As for the outlook, the year-on-year rate of increase in the CPI (all items less fresh food), excluding the direct effects of the consumption tax hike, is likely to be around 1–1/4 percent for some time as the effects of the upward pressure from prices of petroleum products subside.
Thereafter, it is likely to rise, reflecting factors such as the improvement in the aggregate supply and demand balance due to the recovery of Japan’s economy as well as the rise in medium- to long-term inflation expectations in response to fundamental changes in the public’s expectations.