Bearing the lack of such manoeuvrability and the malfunctioning of transmission mechanism at present, however, I think it is critically important and urgent to take practical steps to restore the effectiveness of the transmission mechanism through which monetary easing influences economic activity and prices.
I would like to emphasize that it would be a complete misunderstanding of the Bank’s policy intention to conclude that the Bank is not actively implementing monetary policy to overcome deflation, based solely on the fact that the Bank does not adopt inflation targeting at this juncture.