the guideline for market operations, in which it sets the short - term policy interest rate at minus 0. 1 percent and the target level of 10 - year jgb yields at around zero percent. japan ’ s economy has continued on a moderate expanding trend and already is no longer in deflation in the sense of a sustained decline in prices. however, it is likely to still take time to achieve the price stability target of 2 percent. in addition, there remain high uncertainties regarding the outlook for economic activity and prices including developments in overseas economies. based on this recognition, the bank considers it important to make clearer its policy stance to persistently continue with powerful monetary easing toward achieving the price stability target. thus, the bank decided last month to clarify forward guidance for policy rates introduced in july 2018 and maintain the current extremely low levels of short - and long - term interest rates for an extended period of time, at least through around spring 2020, taking into account 1 / 2 bis central bankers'speeches uncertainties regarding economic activity and prices including developments in overseas economies and the effects of the scheduled consumption tax hike. the bank also decided to take such measures as the expansion of eligible collateral for the bank ’ s provision of credit, thereby contributing to smooth fund - provisioning as well as to securing market functioning. these measures likely will strengthen public confidence in continuing with powerful monetary easing, thereby further ensuring the achievement of the price stability target and leading to stability in financial markets. the bank will continue to examine the risks considered most relevant to the conduct of monetary policy and conduct its policy in an appropriate manner, taking account of developments in economic activity and prices as well as financial conditions. thank you. 2 / 2 bis central bankers'speeches

of automobiles and related items, capital goods and parts, and electronic components – were somewhat weak. this weakness in exports is attributed to a temporary slowdown in the pace of economic recovery overseas as well as the effects of the yen ’ s appreciation in the summer of 2010 and inventory adjustments in it - related goods such as personal computers. from the beginning of 2011, however, exports and production were gradually returning to an upward trend, supported by a resumption of growth in overseas economies. private consumption had been improving, with car sales resuming an uptrend after the fall following the expiration of subsidies for energy efficient cars, and business fixed investment and housing investment was also starting to pick up from the significant decline after the financial crisis. in other words, before the earthquake it appeared that economic activity in japan was gradually emerging from its temporary pause. developments in japan ’ s economy after the earthquake the effects of the great east japan earthquake on march 11 changed the situation considerably. according to cabinet office estimates, the amount of damage to capital stock will be about 16 to 25 trillion yen, or about 3 to 5 percent of japan ’ s annual nominal gdp. the extent of the damage from this disaster will be significantly greater than that from the kobe earthquake, which caused about 10 trillion yen in damage to capital stock. of all natural disasters in japan since the start of the meiji era in 1868, only the great kanto earthquake of 1923 has caused more damage. more than 100, 000 people lost their lives in that earthquake or remained unaccounted for thereafter, and the direct economic damage amounted to about 30 percent of nominal gnp at the time. moving on to the economic situation after the march 11 earthquake, japan ’ s economy is under strong downward pressure, mainly on the production side. the disaster has caused bis central bankers ’ speeches two types of supply constraints, which i will explain shortly. as a result of these constraints, production in some industries has declined substantially, which has had a severe impact on exports and domestic shipments. business sentiment has also deteriorated and consumer appetite has waned. one of these supply constraints is the widespread damage to production facilities and associated malfunctioning of the supply chain networks that deliver parts. the kobe earthquake had a devastating impact on city functions in the part of southern hyogo prefecture that was directly hit, but the affected areas were not so widespread. in contrast, the march 11 earthquake caused devastating damage over a much wider area, destroying the production facilities of many