It is crucial that people actually experience inflation above 2 percent and thereby the perception takes hold among them that prices of goods and services tend to go up every year by around 2 percent. With this in mind, the Bank, under the inflation-overshooting commitment, has committed itself to continuing with large-scale monetary easing until such situation is achieved.
The second component is yield curve control. The Bank facilitates the formation of the yield curve that is considered most appropriate for achieving the price stability target of 2 percent, taking account of developments in Japan's economic activity and prices as well as financial conditions.