In sum, Japan's economy is likely to achieve sustainable growth under price stability. This outlook is based on the assumption that market participants and firms have, to some extent, factored future changes in monetary policy into their decisions. Therefore, for economic activity and prices to develop in line with the above outlook, adjustment in the level of the policy interest rate seems necessary.
The assessment from the second perspective - in which the Bank assesses the risks considered most relevant to conducting monetary policy, looking over a longer time horizon and taking account of the cost incurred should risks materialize, however improbable they might be - is that although at present there seem to be no signs of overinvestment, the stimulative effect of monetary policy on economic activity and prices may be amplified with corporate profitability high and prices on a positive trend.