A clear relationship between the yen-dollar exchange rate and the year-on-year rate of change in consumer prices can only be observed in the short period after the introduction of QQE (Chart 17). This suggests that current inflation has not been brought about merely by the depreciation of the yen.
Third, financial institutions with a sufficient capital position can easily raise liquidity in financial markets. Thus, liquidity consideration has been assigned only an ancillary role in regulation and supervision. 2  See Financial Services Authority (2009).