by the european debt problem has abated somewhat, partly owing to the fact that european authorities have carried out a range of policy measures. nevertheless, particular attention needs to be paid to developments in financial markets, as fiscal and economic structural reforms in spain and greece are still underway. ii. recent developments in japan ’ s economy weakening economic activity i will now explain recent developments in japan ’ s economy. in the first half of 2012, japan ’ s economy registered high growth : real gdp in january – march grew at an annual rate of 5. 2 percent as domestic demand remained firm, mainly supported by both public and private reconstruction - related demand. however, in july – september, gdp growth turned negative for the first time since october – december 2011, showing an annual decline of 3. 5 percent. reflecting the deceleration in overseas economies, exports and industrial production have decreased. this weakness in exports and industrial production has started to affect domestic demand, which has remained firm thus far. for instance, business fixed investment in the manufacturing sector has shown some weakness, mainly due to the deceleration in overseas economies. going forward, we need to remain vigilant as to whether there are any signs of firms delaying business fixed investment. in the manufacturing sector, the yearon - year rate of change in the number of new job offers has been negative since june 2012 ; moreover, overtime hours worked in the economy overall have also been decreasing somewhat, led by a decline in the manufacturing sector. private consumption has lost some momentum, partly due to the decline following the expiry of subsidies for the purchase of environmentally friendly cars. on the whole, domestic demand is expected to remain resilient, mainly supported by reconstruction - related demand in a broad sense, including investment related to disaster prevention and energy. it is, however, unlikely to increase at a pace that will offset the bis central bankers ’ speeches weakness in exports. owing to these developments, the bank judges that japan ’ s economy as a whole has been weakening somewhat. as for prices, the year - on - year decline in the consumer price index ( cpi, all items less fresh food ) peaked at a rate of 2. 4 percent in august 2009 after the lehman shock. since then, the aggregate supply and demand balance – which shows the rate of utilization of labor and fixed capital – has been improving moderately and the year - on - year rate of decline in the cpi has been shrinking steadily since end - 2009 and recently has been around 0 percent

policy strategy, alternative policy options and risks, as well as on communication. likewise, the staff will have more time for analysis, with less time spent preparing summaries of recent developments. the board will also be able to hear directly from more staff and have greater opportunity to request work on particular topics. and the post - meeting media conferences will provide a timely opportunity to explain the board's decisions and to answer questions. this will complement our existing communications, including through speeches with q & a. together, this is a significant package of reform that will contribute to better decision - making and communication. 2 / 6 bis - central bankers'speeches the review also made a number of other recommendations that, in the board's view, are best considered after the legislative process has been completed and the new monetary policy board is up and running. this will avoid the current board locking the new board into a particular approach. these recommendations relate to : the publication of an unattributed vote count all board members making regular public appearances to discuss their thinking and decisions on monetary policy the establishment of an expert advisory group to engage with the board board papers being published with a five - year lag. these issues are interrelated. practices differ across central banks, and they are often tailored to the country's particular circumstances and institutional structure. the current board has therefore judged that these four issues are best considered by the new monetary policy board as a package. in each of these areas, there is no universally accepted definition of best practice. the current reserve bank board structure, and that recommended by the review, is unusual by international standards. in almost every other central bank, most of the decision - makers are insiders – that is, they spend the bulk of their time inside the central bank. in our case, only two of nine board members are insiders. the other seven spend the bulk of their time outside the rba and this will remain the case. this is a significant difference between the rba and other central banks. the australian model has the advantage of ensuring there is diversity of thought and it helps bring a wider perspective to monetary policy decisions. however, it does have implications for the way those decisions are communicated and the appropriate accountability mechanisms. in my view, it is right to allow the new board to consider these issues and make its own decisions after due deliberations. the bank, together with members of the council of financial regulators, has also been considering the recommendations that relate to