If you remember it was running at about 6 per cent in 2003/04, but is now growing at about 3½ per cent. More importantly, the composition of domestic demand has changed for the better – the driving force behind demand growth for a long time was consumption spending, but that has now clearly slowed.
In this situation, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices. Meanwhile, Japan's financial system has maintained stability on the whole.