- year rate of change in cpi excluding volatile food, following – 0. 2 percent in fiscal 2012, is forecasted to gradually increase the rate of change, with + 0. 4 percent in fiscal 2013, and, on the basis of excluding the effects of the consumption tax hike, + 0. 9 percent in fiscal 2014. the reason the bank set 2 percent as the “ price stability target ” is, that the achievement of 1 percent – a goal for the time being set by the bank – has come into sight in fiscal 2014, and that it has judged necessary to clarify its next target. i will later explain again such line of thinking. iii. thinking behind the recent policy decisions : decisive additional steps in monetary accommodation let me explain the bank ’ s monetary policy conduct. as i mentioned at the outset, at the monetary policy meeting last week, the bank took additional steps to provide monetary accommodation decisively toward overcoming deflation as early as possible and achieving sustainable economic growth with price stability. specifically, first, the bank has set the “ price stability target ” at 2 percent in terms of the year - on - year rate of change in the cpi, and second, aiming to achieve the target at the earliest possible time, introduced the “ open - ended asset purchasing method ” under the asset purchase program. and third, the bank clarified its posture that it will strengthen policy coordination with the government and work together. introduction of “ price stability target ” to begin with, let me talk about the bank ’ s decision to set 2 percent in terms of the year - on - year rate of change in the cpi as the “ price stability target. ” japan ’ s economy has been in deflation for a long period. behind that not only cyclical factors but structural factors have been at play. amid substantial changes of the environment for japan ’ s economy, such as rapid ageing and globalization, japan has fallen behind in bis central bankers ’ speeches adapting to those changes, and, as a result, the growth rate has been on a downtrend and firms ’ and households ’ medium - to long - term growth expectations have also declined. amid low growth expectations, firms have sought to survive with cost cutting and price competition. in doing so, adjustment has been made mainly in wages and working hours, which exerted successive downward pressure on prices in japan ’ s economy. to put it another way, if such structure can be converted, it becomes possible to overcome deflation. the bottom line is,

measure. purchases of financial assets mean to purchase a wide range of financial assets, including government bonds, corporate bonds, cp, exchange - trade funds ( etfs ), and real estate investment trusts ( reits ), from the market through a program called “ asset purchase program. ” through the purchases, the bank aims at encouraging a decline in longer term interest rates and narrowing the risk premiums, thereby facilitating firms ’ and households ’ funding at a low cost. in actually purchasing financial assets, the bank used to set the goal of an outstanding purchased amount at a particular point of time in the future, like “ about 101 trillion yen by the end of 2013. ” this time, the bank has decided to purchase a certain amount of financial assets every month without setting any termination date because the bank judged that it could clearly show its intention to continue purchasing financial assets toward achieving the newly introduced “ price stability target. ” specifically, after completing the current purchasing method, from january 2014, the bank will, for some time, purchase every month about 13 trillion yen, 2 trillion of which is japanese government bonds, of financial assets. as a bis central bankers ’ speeches result, the total size of the asset purchase program will be increased by about 10 trillion yen to about 111 trillion yen in 2014 and is expected to be at least maintained thereafter. about the new asset purchasing method, we have sometime been asked “ as you have introduced a new method, why don ’ t you start purchases immediately rather than waiting until the beginning of next year? ” a clear answer would be that the bank already decided on a massive fund provision of more than 50 trillion yen this year. to elaborate on that, the amount outstanding of the “ asset purchase program ” now stands at about 65 trillion yen and, by pursuing the already decided purchases, it will increase by about little less than 40 trillion yen by the end of the year. in addition, the bank introduced last october a framework called “ stimulating bank lending facility, ” within which the bank provides funds to financial institutions for the entire amount of a net increase in lending. i will talk about the thrust of the facility later. the fund - provisioning under the facility is expected to reach more than 15 trillion yen in about a year, based on the recent lending data. putting those together, the bank will make a new massive fund - provision of more than 50 trillion yen in about a year. on top of those purchases and fund - provisioning, from the beginning of next year