Meanwhile, the yen has been appreciating against the deutsche mark since mid-February and recently moved at around ¥ - 73. BIS Review 32/1997
In similar fashion, setting actual interest rates below equilibrium rates stimulates economic activity, whereas setting interest rates above equilibrium restrains activity. Over recent years, economic activity in the euro area has been below potential – in other words there has been a negative output gap – which has put downward pressure on inflation.