The reason for the decline in medium- to long-term inflation expectations in the period from the 1970s to the first half of the 1990s is that a rise in the prices of goods and services, together with inflation expectations for the general price level, were contained by a combination of factors such as stable crude oil prices, the continued appreciation of the yen and resultant pressure to reduce the difference between domestic and foreign prices, as well as deregulation and other measures to promote competition.
Nevertheless, since the latter half of the 1990s, the correlation between the output gap and the actual inflation rate has been stable. At present, it seems that there is no major change in medium- to long-term inflation expectations.