As mentioned at the beginning, the Bank projects that the year-on-year rate of change in the CPI will remain negative for fiscal 2010, but will enter positive territory in fiscal 2011. Risk factors As just described, Japan’s economy is making steady progress toward returning to a sustainable growth path with price stability, helped by the improvements in overseas economic conditions.
The Bank is fully aware of both upside and downside uncertainties regarding the outlook for the economy. On one hand, if emerging and commodity-exporting economies achieve faster growth, Japan’s domestic private demand could recover at a faster pace than expected through spillovers from an increase in exports.