An alternative perspective holds that the recent behavior of interest rates does not presage an economic slowdown but suggests instead that the level of real interest rates consistent with full employment in the long run--the natural interest rate, if you will--has declined.
The Bank has learned valuable lessons from the disturbances in the financial system associated with the birth and collapse of the “bubble” economy and from its own responses to the disturbances, including the failure of Nippon Credit Bank. These lessons will always be remembered by the Bank of Japan and referred to in making decisions in the future.