This judgment took into account, for example, (1) the scope needed to avoid another deflationary period, (2) the scope needed for the conduct of flexible monetary policy in normal periods to avoid the zero lower bound in the recessionary phase of the economy, (3) the upward bias in the CPI statistics, and (4) the need to align with the global standard of a price stability target.
The size of monetary base, that is the sum of cash in circulation and the outstanding balance of current accounts at the Bank of Japan, has posted dramatic double-digit growth on a year-on-year basis to reach almost 17% of GDP. This is the highest level over the last hundred years with the exception of a period during World War II.