On the one hand, the Bank will continue to pursue its CPI-based inflation goal of 1 percent annually, given that the medium- to long-term price stability goal is set within 2 percent annual inflation. A monetary easing policy – based on the virtually zero interest policy and the Asset Purchase Program – will be pursued until the 1 percent inflation goal is in sight.
Simultaneously, the government is expected to vigorously promote measures to help reduce structural constraints and thus strengthen Japan’s growth potential. I personally believe that this statement signals to the public a strong will on both sides to overcome deflation and restore sustainable economic growth with price stability. Therefore, I regard this action positively.