The signs of growing risk tolerance in financial markets were evident in data on issuance, pricing and flow across a range of markets, and financial instruments with a riskier and more complex structure were returning. With the dramatic fall-off in risk appetite in recent weeks, investors have shifted from a search for yield to a search for safety.
The year-on-year rate of change in the CPI has recently been at around 0 percent or slightly negative, but looking to the future, the rate of increase is projected to rise, reflecting factors such as the improvement in the aggregate supply and demand balance as well as the rise in medium- to long-term inflation expectations on the back of the change in expectations of economic entities, and it is likely to reach around 2 percent – the price stability target – toward the latter half of the projection period.