The improvement in corporate profits is partly due to a fall in commodity prices – particularly crude oil prices – and to the rise in repatriated income from overseas business through dividends and interest, which has accelerated partly as a result of the correction of excessive appreciation of the yen.
As widely recognised in the literature, policy outcomes can be improved if complementarities between these two policy areas are exploited.2 For instance, during phases of risk build-up, effective macroprudential policy can unburden monetary policy with respect to financial stability concerns.