that it is necessary to closely examine a wide range of price indicators, including wages, as the recent rise in the cpi for all items less fresh food and energy might only be attributable to households ’ acceptance of price rises, mainly in daily necessities, brought about by the decline in energy prices. with these factors in mind, i would like to discuss recent developments in the cpi for all items less fresh food and energy. there is a view that its recent rise can be inferred from the yen ’ s depreciation observed since the expansion of qqe at end - october 2014, and that such a rise will peak out after the turn of fiscal 2016 as no further depreciation is expected. i would say, however, that it seems unreasonable to explain the recent developments in the cpi for all items less fresh food and energy in a consistent manner by the yen ’ s depreciation alone, as prices of food products and durable goods – leading to the recent rise in the cpi for all items less fresh food and energy – have resumed a clear uptrend recently under the yen ’ s depreciation trend that has generally lasted since around the introduction of qqe in april 2013. i consider that the recent rise is actually attributable to the fact that households have more readily accepted price rises on the back of moderate improvement in the employment and income situation as well as the decline in energy prices, and firms accordingly have taken a somewhat aggressive stance of setting higher prices. yet, it is uncertain whether or not households will continue to accept price rises if the effects of the decline in energy prices dissipate. moreover, if no further depreciation of the yen is expected, it is likely that prices of food products and durable goods will stop rising. in view of these possibilities, the key to whether or not the year - on - year rate of increase in the cpi for all items less fresh food and energy will remain stable at around 1 percent will likely lie in whether rises in services prices – which have been lagging recently – would start to be observed following the wage negotiations for fiscal 2016. there are uncertainties over future developments in the wage negotiations, as i mentioned earlier, and also downside risks as to whether price rises in daily necessities and durable goods will lead to a rise in services prices. in my opinion, however, it is possible to generally maintain the annual growth pace of around 1 percent throughout the projection period, excluding the

s. economy has been growing at a slower pace since this spring. this is partly because households ’ real purchasing power has declined due to the rise in gasoline prices seen until around spring, and there have been difficulties in procuring automobile parts due to the disaster in japan. it should be noted, however, that gasoline prices have fallen back somewhat since may and japan - led supply - chain disruptions have started to be resolved. therefore, the view held by the u. s. authorities and economists is that the recent economic slowdown is generally transitory, and their baseline scenario is that the pace of growth will resume a recovery supported by the accommodative financial environment. of course, such an outlook entails uncertainties. the focal point is on how to assess balance - sheet adjustment pressure. recent data on household debt and housing prices indicate that balance - sheet adjustment in the household sector is ongoing. the recovery in employment has also been disappointing. just as in the case for japan in the 1990s, after the bursting of the large credit bubble, the economy often continues to face a low growth rate for a bis central bankers ’ speeches protracted period, although there are some short - term boosts reflecting the implementation of fiscal stimulus packages or accommodative monetary policies. having said that, it might not be appropriate to conclude that the u. s. economy will follow a path similar to the one japan once experienced, taking into account the u. s. economy ’ s distinctive flexibility and the fact that it is a commodity - exporting country. careful attention should be paid to how strongly balance - sheet adjustment pressure continues to constrain growth in the u. s. economy. the european economy as a whole continues to recover moderately, although there are large differences in the economic growth rates between the euro area ’ s major countries, such as germany, and its peripheral countries, including greece. the german economy maintains its robustness ; for example, the latest unemployment rate is 7. 0 percent, the lowest level since the reunification of west and east germany. on the other hand, peripheral countries are experiencing a tough time, as witnessed by the recent greek growth data, which showed an 8. 1 percent decline on a year - on - year basis. regarding prospects for the european economy, the focal point clearly is developments in the sovereign debt problem in peripheral countries. the essence of the problem is an adverse feedback loop among fiscal conditions, the financial system, and the real economy.