Relation to Inflation Targeting I have explained that the Bank recently introduced the combination of “the price stability goal in the medium to long term” and “strong policy commitment based on the CPI inflation rate.” How is this related to the so-called “inflation targeting?” I would like to note at the outset that, after going through a bubble in Japan and experiencing the recent financial crises, the monetary authorities around the world have made efforts to improve their frameworks for the conduct of monetary policy by learning from each other’s lessons in the wake of those crises, and consequently have converged to share the following three elements in such frameworks.
First, they published specific inflation rates considered to be consistent with their responsibility. As I have already explained, although the wording differs, such as between the Bank of England’s “target,” “definition” used by the European Central Bank and the Swiss National Bank, the U.S. Federal Reserve’s “goal,” and the Bank’s “medo (in English, ‘goal’),” their characteristics are basically same.