In addition, at the MPM held in July 2016, the Bank decided on an increase in purchases of exchange-traded funds (ETFs) and measures to ensure smooth funding in foreign currencies, for two reasons: in order to prevent uncertainties that have been heightening against the backdrop of the United Kingdom’s vote to leave the EU and the slowdown in emerging economies from leading to a deterioration in business confidence and consumer sentiment, and to ensure smooth funding in foreign currencies by Japanese firms and financial institutions, thereby supporting their proactive economic activities.
The word “deflation” – or defure in Japanese – has not been heard so much except in the context of “overcoming of deflation.” Firms’ price- and wage-setting behavior has been changing and rises in base pay, which had not been seen for more than a decade, have taken place in two consecutive years starting from last year.