In what follows, I will review the situation after the Lehman shock – the financial crisis following the September 2008 failure of Lehman Brothers – which is the starting point of the current recovery phase of Japan’s economy and also an underlying cause of the European debt crisis, and talk about developments thereafter.
In particular, in the statement following our meeting earlier this month, we indicated that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.