In order to persistently continue with the current powerful monetary easing, it is necessary to contain the accompanying negative effects, or the side effects. In the first half of last year, there was a growing concern that the functioning of the Japanese government bond (JGB) market had deteriorated under the Bank's large-scale JGB purchases, as seen, for example, in rigid interest rate formation.
The Governing Council is monitoring wage negotiations in the euro area countries with particular attention. Any indexation scheme of nominal wages to prices should be eliminated. Finally, further rises in oil and agricultural prices, continuing the strong upward trend observed in recent months, as well as increases in administered prices and indirect taxes beyond those foreseen thus far, could materialise.