as commercial paper ( cp ), corporate bonds, exchange - traded funds ( etfs ), and japan real estate investment trusts ( j - reits ). that has been a measure, through influencing longer - term interest rates and risk premiums, to urge the effects of monetary easing to spread steadily over to firms ’ funding costs. third, the bank has been aiming at 1 percent in terms of the year - on - year growth rate in consumer prices for the time being and made a commitment to continuing its powerful monetary easing through the pursuit of virtually zero interest rate policy and purchases of financial assets until it judges the 1 percent goal to be in sight. by a central bank making a commitment to continuing monetary easing for a long period, there will be momentum for pushing down the entire yield curve, including longer term yields. background to the enhancement of monetary easing at the monetary policy meeting held last week, the bank further enhanced monetary easing. specifically, first, the bank decided to increase the total size of the program by about 10 trillion yen, from about 70 trillion yen to about 80 trillion yen. the completion of the purchases under the program was extended for six months and the purchases will continue until around the end of 2013. second, the bank decided to remove the minimum bidding bis central bankers ’ speeches yield, which used to be set at 0. 1 percent per annum, for the outright purchases in order to ensure smooth purchase of the japanese government bonds ( jgbs ). looking at the developments in economic activity and prices that led to the decisions, as explained earlier, while overseas economies have moved somewhat deeper into a deceleration phase, the pick - up in economic activity has come to a pause and is expected to level off more or less for the time being. the year - on - year rate of change in the cpi excluding volatile food is to hover at around 0 percent for the time being. in the meantime, attention should be paid to the effects of financial and foreign exchange market developments on economic activity and prices. until recently, the bank had judged that, from a longer term perspective, japan ’ s economy would return to the moderate recovery path as domestic demand remained firm and overseas economies gradually emerged from the deceleration phase. and, the year - on - year rate of change in the cpi excluding volatile food would start to gradually increase and was likely to reach 1 percent in the not so distant future from fiscal 2014 onward. however, taking into account the current developments in economic activity

percentage points and is now approximately the same as among our trading partners. the krone has depreciated by about 6 per cent over the past year and the krone exchange rate, measured by the import - weighted index i - 44, is now at the level prevailing in march 2002. this is approximately on a par with the average for the 1990s. in the past few days, the krone has appreciated again somewhat. in february, inflation stood at – 0. 1 per cent. apart from some temporary, technical factors that together account for 3 - 4 tenths of a percentage point, three main factors have contributed to the substantial deviation from the inflation target : • first, the global downturn had considerable implications for the impact of interest - rate setting in norway, via the exchange rate for instance. • second, low external inflation and rapid shifts in the international division of labour has resulted in a fall in prices for imported goods and services. this also applies when these prices are measured in terms of what norwegian importers pay in foreign currency. the change in trade patterns has made a considerable contribution to the sharp decline in prices for clothing, footwear and audiovisual equipment. rapid technological advances have also pushed down prices for audiovisual equipment. • third, competition has probably increased in the retail industry and other service sectors in norway in recent years. initially, heightened competition affects companies ’ profit margins. but enterprises will respond by reducing their costs. this will occur in part in the individual business, but subcontractors will also be required to reduce their prices and enhance efficiency. therefore, increased competition usually triggers higher productivity growth in the economy. low inflation may therefore be matched by growth in productivity. prices for domestically produced goods and services are expected to rise towards the beginning of 2005 due to higher capacity utilisation in the norwegian economy. strong employment growth may contribute to somewhat higher wage growth than in 2004. at the same time, domestically produced goods and services are affected by exchange rate changes, albeit with a longer lag than is the case for imported consumer goods. there are clear signs that the global economy has passed the trough. however, while the outlook is brighter, price inflation is still low and interest rates are being kept unusually low. economic growth is high again in the us, but there is still excess production capacity and very low inflation. workforce reductions may no longer be as severe, but companies are still not hiring new staff. it may take some time before interest rates are increased