4  BIS Review 126/2007  I would now like to talk about the Bank’s conduct of monetary policy, bearing in mind the assessment above.
The Bank’s basic thinking has been that (1) given the extremely accommodative financial conditions, the level of interest rates is to be raised if Japan’s economy is to follow a path of sustainable growth under price stability, and (2) the pace of increase in interest rates should be determined in accordance with improvements in the economic and price situation without any predetermined view.