Japan's economy has been exposed to many severe downturns over the decades, but every time it enhanced its capability to create new products and services with added value based on the experience, strengthening the foundation for future growth.
So the Bank will lower interest rates to stimulate the economy, and absorb economic slack, consistent with keeping inflation on target. The significant easing of monetary policy during 2001 was a key factor behind the strong growth of household demand in the first half of this year. Let me now turn to the outlook.