Second, if corporate profits decrease due to the yen’s appreciation, or if the economy’s potential growth rate and firms’ growth expectations for the domestic market wind up being lower than expected, firms might become more cautious about wage raises, which could in turn restrain private consumption. 2.
Thinking behind the outlook for prices Let me turn to the year-on-year rate of change in the CPI (all items less fresh food). The Bank’s baseline scenario is that the timing of the rate of change reaching around 2 percent will likely be at the end of the projection period — that is, around fiscal 2018.