Compared to the United States and Europe, inflation expectation formation in Japan is judged as being largely adaptive, meaning that the expectations are formed in accordance with developments in the observed inflation rate.
Euro area money market spreads, especially at shorter maturities, have narrowed continuously and remain at low levels. There are also signs that unease about counterparty credit risk is abating. This is reflected in longer-term spreads between interbank deposits and repo interest rates, which have also steadily declined. Corporate bond and equity markets have continued to recover.