Price developments  Let me turn to price developments. The year-on-year rate of increase in the CPI (excluding fresh food) excluding the direct effects of the consumption tax hike was plus 1.3 percent in July. Thus, Japan’s economy is on course to achieving an inflation rate of 2 percent – the price stability target – as expected (Chart 7).
The household sector remained a relatively bright spot in the economy in 2001; increases in spending for consumption goods and housing prevented the downturn in investment from generating a deeper recession. Household spending has continued to rise at a solid pace during the recovery.