easing ” the introduction of which was decided in october and “ fund - provisioning measure to support strengthening the foundations for economic growth ” introduced in june. the bank will continue to carefully examine the outlook for economic activity and prices, and take policy actions in an appropriate manner as a central bank. as i have mentioned earlier, to meet the critical challenge of reforming the supply system, which is faced by japan ’ s economy, the role of the policy authorities and, even more than that, of firms and financial institutions would be crucial. to meet the challenge, it is necessary to respond to the new demand created in accordance with the changes in the economic environment such as a rise in emerging economies as well as to nurture new businesses that tap potential demand. in that regard, in hiroshima prefecture, manufacturing industry including automobile, machinery, and steel has been actively engaged in exporting to asian countries and has been exerting their strength. moreover, there are not a few firms, inclusive of nonmanufacturers, which were established here and developed to run nation - wide business, and thus this region seems to be equipped with a basis to nurture new businesses. this region already holds a variety of elements necessary for growth such as a geographical merit that it is close to other asian countries, ample tourism resources with two world heritage sites and the rich natural environment, a distinguished reputation as an international city, and high education level with japan ’ s fourth highest college advancement rate. that shows that the region has enormous potential. on the financial front, financial institutions in hiroshima prefecture have been pursuing forward - looking approaches such as establishing a system to support firms that are strengthening their businesses toward asian countries. moreover, several financial institutions have participated in the bank ’ s “ fund - provisioning measure to support strengthening the foundations for economic growth ” and have been using it as an opportunity to expand new lending methods that enable long - term lending. i sincerely wish you every success in your endeavor to achieve growth and i also hope that the economy of this region will further fulfill its potential.

would like to emphasize here is that the bank employs as its judgment criterion, whether developments in the inflation rate expected in the future, not the rate at the moment, is consistent with the “ understanding. ” 2 given that it takes some time for the effects of monetary policy to spread, in order to achieve price stability from a long - term perspective, it would be necessary to pay attention not only to the short - term inflation rate at the moment but also to the forecast of how the future inflation rate will develop and to consider its consistency with the “ understanding. ” moreover, it is essential to learn from the experience that stability in economic activity and prices from a long - term perspective was undermined in the emergence and bursting of the recent global credit bubble, as a result of significant risks while rather technical, as for the cpi, effects of a revision of the base year should also be noted. the change in the base year from 2005 to 2010 is scheduled to be made in the summer of 2011. in general, a year - onyear change in the cpi tends to be overestimated as it goes farther from the base year, and such distortion tends to be corrected at the time of a base year revision. namely, at the time of base year revision in 2011, it is likely that the year - on - year changes in the cpi will be revised downward. while it is difficult to estimate the degree of downward revision at this point, we should keep in mind a possibility that, looking back in the future, the degree of decline in the cpi could have been larger than previously recognized. this thinking is similar to that called “ forecast targeting, ” which uses whether a forecast will reach the target rate as a judgment criterion. including the accumulation of financial imbalances being overlooked. in other words, if one becomes complacent about the current price stability and overlooks the accumulation of financial imbalances such as a “ bubble, ” there is a possibility that the economy will face a continued decline in prices after the burst of a “ bubble. ” the bank stated that it will maintain the virtually zero interest rate policy on condition that examination of risk factors, including the accumulation of financial imbalances, does not reveal any problems. third, the bank will specifically examine a program to purchase financial assets. the program aims at purchasing various financial assets, such as government securities, commercial paper, corporate bonds, exchange - traded funds ( etfs ), and japan real estate investment trusts ( j