The Bank will pay close attention to future developments in economic activity and prices and, in particular, to whether downside risks will decrease, thereby increasing the likelihood of the economy realizing sustainable growth with price stability, or whether the probability of such risks materializing will rise.
So far, I have described the Bank's thinking regarding the conduct of monetary policy in terms of interest rate policy. Now, let me remind you of an important fact: proper functioning of financial markets is a prerequisite for monetary policy to be effective. It is therefore vital to ensure the stability of Japanese financial markets when global financial markets remain volatile.