Furthermore, the disappearance of the money illusion has contributed to a downward revision in expectations of private agents’ permanent income, which has accelerated and amplified the impact of the policy measures on domestic spending.
With regard to the future conduct of monetary policy, the Bank decides the guideline for market operations at each Monetary Policy Meeting with a view to facilitating the formation of a yield curve that is deemed most appropriate for maintaining the momentum toward achieving the price stability target of 2 percent, taking account of developments in economic activity and prices as well as financial conditions.