The Bank’s projections for economic activity in Japan are as follows: while the effects of various policy measures are likely to wane, emerging and commodityexporting economies are likely to maintain high growth, and the momentum for a selfsustaining recovery in Japan’s domestic private demand is expected to gradually gather pace; Japan’s economy therefore is likely to be on a recovery trend.
1 For these projections to materialize, it is important that improvements in the corporate sector feed through to the household sector supported by a virtuous cycle of increased production, income, and spending. However, considering Japan’s experience during the economic recovery phase since 2002, the pace with which improvements in the corporate sector feed through is likely to remain moderate.