The Bank considers the argument to carry great significance for the domestic financial system, and therefore hopes that a national consensus on the matter will be reached through wide discussions. The global and domestic conditions facing Japan’s financial system are becoming increasingly harsh, as represented by the expansion of the “Japan premium” in international financial markets.
The choices may now become less favorable - specifically some combination of slower growth and perhaps higher inflation. Of course, because of the acceleration in productivity, such a slowdown may still leave the growth rate of real GDP well above the average that prevailed over the two or more decades preceding the acceleration.