This consists of two major components: (1) an inflation-overshooting commitment and (2) yield curve control. Let me talk about each of these in turn. II. Inflation-Overshooting Commitment I will start by talking about the inflation-overshooting commitment. There is a widespread consensus that anchoring inflation expectations is very important in achieving a price stability target set by the central bank.
Moreover, given the high degree of uncertainty regarding future economic developments, the possibility that weak demand will intensify downward pressure on prices warrants careful monitoring. 1  This report is based on data and information available at the time of the Bank of Japan Monetary Policy Meeting held on June 14 and 15, 2001.