in which the consumption tax rate was raised - - namely, april 2014 or october 2019. 2. there is a discontinuity in the data in april 2013 due to a change in the survey method. source : cabinet office. chart 11 ii. price developments consumer prices long - term developments y / y % chg. recent developments y / y % chg. effects of the consumption tax hikes and free education policies energy cpi ( less fresh food ) - 1 - 2 - 1 others cpi ( less fresh food ) - 3 cy 95 - 2 cy 1 4 note : in the left chart, figures exclude the effects of the consumption tax hikes. they incorporate the effects of the october 2019 tax hike and policies concerning the provision of free education. source : ministry of internal affairs and communications. chart 12 ii. price developments boj's price forecasts cpi ( all items less fresh food ) < january 2020 outlook report > 2. 5 y / y % chg. price stability target ( 2 % ) 2. 0 1. 5 fiscal 2019 + 0. 6 % 1. 0 fiscal 2021 + 1. 4 % 0. 5 fiscal 2020 + 1. 0 % 0. 0 - 0. 5 - 1. 0 fy 12 note : figures exclude the effects of the consumption tax hike in april 2014. forecasts are the medians of the policy board members'forecasts ( point estimates ). sources : ministry of internal affairs and communications ; bank of japan. chart 13 iii. japanification and economic growth international comparison of gdp nominal gdp cy 1991 = 100 japan u. k. germany nominal gdp per working - age person nominal gdp per capita u. s. france cy 1991 = 100 cy 91 cy 91 real gdp cy 91 cy 1991 = 100 source : world bank. cy 91 real gdp per working - age person real gdp per capita cy 1991 = 100 cy 91 cy 1991 = 100 cy 1991 = 100 cy 91 chart 14 iii. japanification and economic growth okun's law relationship between economic growth rate and unemployment rate real gdp ( y / y % chg. ) fy 1956 - 1995 fy 1956 - 2018 - 2 fy 1956 - 1995 fy 1996 - 2018 - 4 fy 1996 - 2018 - 6 - 0. 6 - 0. 4 - 0. 2 0. 0 0. 2 0. 4 0. 6 0. 8 1. 0 1. 2 unemployment rate ( y / y chg., % points )

of introducing the real time gross settlement system. we could raise the current account balance above 12 trillion yen in september because of a surge in demand for liquidity caused by the terrorist attacks, the collapse of a large retailer, and a fall in stock prices. the effects of those factors were also amplified in the period approaching the end of september. the rising demand for liquidity also reflected waning incentives of financial institutions to invest their funds in money markets. investing 10 billion yen overnight earns merely 273 yen, which is not sufficient to cover various transaction costs. when interest rates significantly decline, financial institutions prefer to hold funds with the bank of japan even without any interest earnings. once such movement spreads among financial institutions, funding in money markets becomes more difficult which will force the borrowers to build up the current account balance from a precautionary motive. what is important therefore is not whether we can increase the current account balance under the effectively zero interest rate but what effects such an increase may have. the surge in demand for liquidity after the terrorist attacks is not a favorable development as it reflects rising concern in the financial markets. it may not stimulate economic activities. having said this, increasing the current account balance in response to rising demand for liquidity is one of significant contribution that a central bank could make because it relieves concern in the markets. interest rates, foreign exchange rates, and stock prices the second issue was whether a substantial increase in the current account balance would affect the asset prices such as interest rates, foreign exchange rates and stock prices. the effect of monetary policy permeates to the real economy through significant changes in these asset prices. needless to say, an increase in the current account balance results in a decline in overnight interest rates. once overnight interest rates reach zero percent, however, we can no longer expect a change in interest rates to promote portfolio rebalancing. therefore, if an additional supply of current account balance results in a change in the prices of financial assets, it could be achieved either through a ) reallocation of money from no - risk - no - return current accounts to higher - return - higher - risk assets, or b ) effects on inflation expectation for the future. such effects through these routes could exist at least theoretically and qualitatively. let me review the financial market developments since march from the above viewpoints. not surprisingly, short - term interest rates declined to effectively zero thanks to ample liquidity provision. the lombard - type facility also helped