2011 the bank significantly increased the total size of the program by about 10 trillion yen, from about 40 trillion yen to about 50 trillion yen, in response to the rise in various risks. however, subsequently, downside risks to the economy materialized in the form of, for example, greater adverse effects on japan ’ s economic activity from the deceleration in overseas economies and the appreciation of the yen. consequently, in the october 2011 outlook report, the bank ’ s forecasts were revised slightly downward from those made in july 2011. moreover, the bank judged that there was increased risk that the outlook for economic activity and prices could deteriorate further depending on developments in international financial markets and overseas economies. therefore, even though purchases of financial assets under the program were still approximately 10 trillion yen below the maximum amount decided in august, at the monetary policy meeting held on october 27, 2011 the bank decided to further enhance monetary easing by increasing the total size of the program by about 5 trillion yen, to about 55 trillion yen, for additional purchases of jgbs. the bank needs to do all it can – by vigorously implementing these monetary easing measures – to help japan ’ s economy overcome deflation and return to a sustainable growth path with price stability. the “ understanding ” is the level of inflation that each policy board member understands as being consistent with price stability over the medium to long term. the current “ understanding ” shows that “ on the basis of a year - on - year rate of change in the cpi, it falls in a positive range of 2 percent or lower, centering around 1 percent ”. bis central bankers ’ speeches

the industrial production index in september, production is expected to resume its upward trend. it should be noted, however, that this assessment does not take full account of the effects of the flooding in thailand and therefore needs to be treated with caution. reflecting the pickup in production, real exports, particularly those of motor vehicles and related goods, have been increasing and have surpassed pre - bis central bankers ’ speeches quake levels. corporate activity has been improving in general. with consumer sentiment heading toward a pick - up, private consumption has been showing signs of improvement in a wide range of areas, including retail sales, outlays for travel, and spending in restaurants and the like. while the number of foreign visitors to japan in september was 25 percent below the previous year ’ s level due in part to rumors about radiation contamination and to the appreciation of the yen, the extent of the year - on - year decline has gradually been shrinking since april. as for the outlook, it is possible that the pace of increase in exports will level out because of the effects of the appreciation of the yen and because we are likely to see a waning of demand associated with inventory restocking and the recapturing of market share temporarily lost due to supply constraints. as for the domestic economy, however, there are signs of a rise in demand related to reconstruction after the disaster, and domestic demand as a whole is likely to grow at a moderate pace. demand related to reconstruction is likely to increase further as a third supplementary budget for fiscal 2011 is currently being deliberated in the diet. semiannually, in april and october, the bank releases the outlook for economic activity and prices, or the outlook report for short, in which it makes public its forecasts for economic activity and prices for the next two to three years. in the october outlook report released recently, the forecasts for the year - on - year growth rate of japan ’ s real gdp were 0. 3 percent for fiscal 2011, 2. 2 percent for fiscal 2012, and 1. 5 percent for fiscal 2013. figures were revised slightly downward from the forecasts made in the interim assessment in july 2011, reflecting the effects of the appreciation of the yen as well as the deceleration of overseas economies. as for prices, against the background of the gradual improvement in the aggregate supply and demand balance, the forecasts for the year - on - year rate of change in the cpi for all items less fresh food were 0 percent for fiscal 2011, 0. 1