However, according to the Bank's Tankan (Short-Term Economic Survey of Enterprises in Japan), the diffusion index (DI) for production capacity has been approaching the turning point between insufficient and excessive capacity since the turn of 2019, and my view is that the increasing trend in business fixed investment may come to a halt.
With today’s comprehensive package of monetary policy decisions, we are providing substantial monetary stimulus to ensure that financial conditions remain very favourable and support the euro area expansion, the ongoing build-up of domestic price pressures and, thus, the sustained convergence of inflation to our medium-term inflation aim. Let me now explain our assessment in greater detail, starting with the economic analysis.