Central banks have continued to respond to the pandemic with rapid and decisive policy measures, which have contained the adverse feedback loops between the real economy and financial markets. 19. Besides aggressive cuts in policy rates, many central banks in both advanced and emerging economies have implemented, amongst others, liquidity swap lines, bond purchase programmes and repurchase agreement facilities. 20.
*  *  *  Introduction Today I plan to focus on recent developments in economic activity and prices and the basic thinking behind the Bank of Japan's conduct of monetary policy. The current situation and the outlook for economic activity and prices The Japanese economy has recently emerged from a pause that started during the summer of 2004 and continues to recover.