a change in the survey framework. sources : ministry of internal affairs and communications ; bank of japan. chart 9 outlook for economic activity and prices ( july 2018 outlook report ) the medians of the policy board members'forecasts, y / y % chg. real gdp cpi ( all items less fresh food ) fiscal 2018 + 1. 5 + 1. 1 forecasts made in april 2018 + 1. 6 + 1. 3 fiscal 2019 + 0. 8 + 1. 5 forecasts made in april 2018 + 0. 8 + 1. 8 fiscal 2020 + 0. 8 + 1. 6 forecasts made in april 2018 + 0. 8 + 1. 8 note : figures for the cpi ( all items less fresh food ) exclude the direct effects of the consumption tax hike. source : bank of japan. chart 10 yield curve control 1. 4 % recent 1. 2 bottom of 10 - year jgb yields ( july 27, 2016 ) 1. 0 0. 8 target level of the long - term interest rate : 0. 6 around zero percent short - term policy interest rate : minus 0. 1 percent 0. 4 0. 2 0. 0 - 0. 2 - 0. 4 - 0. 6 residual maturity, year source : bloomberg. chart 11 strengthening the framework for continuous powerful monetary easing taking more time than expected to achieve the price stability target of 2 percent. maintaining the output gap as long as possible within positive territory is appropriate. persistently continuing with powerful monetary easing forward guidance for policy rates " the bank intends to maintain the current extremely low levels of short - and long - term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices including the effects of the consumption tax hike scheduled to take place in october 2019. " ⇒ strengthening the commitment to achieving the price stability target enhancing the sustainability of " quantitative and qualitative monetary easing ( qqe ) with yield curve control " long - term interest rate : the bank maintains the target level of around zero percent. while doing so, the yields may move upward and downward to some extent mainly depending on developments in economic activity and prices. purchases of etfs : the bank maintains the annual pace of increase in the amount outstanding of about 6 trillion yen. while doing so, the bank may increase or decrease the amount of purchases depending on market conditions. etc. achieving the price stability target of 2 percent at the earliest possible time while securing stability in economic and financial conditions. 11■

s conduct of monetary policy next, i would like to explain the bank's conduct of monetary policy including the measures decided at the mpm held two days ago. the bank has been pursuing powerful monetary easing under the policy framework of " qqe with yield curve control, " aiming to achieve the price stability target of 2 percent ( chart 10 ). in order to achieve the price stability target at the earliest possible time, the bank set the target level of 10 - year japanese government bond ( jgb ) yields at around zero percent, and has purchased large amount of jgbs so that the yield curve would be formed in line with the target. by conducting this operation, short - and long - term interest rates have been stable at low levels and lending rates as well as issuance rates for corporate bonds - - to which certain spreads are added in both cases - - also have remained at extremely low levels. the amount outstanding of bank lending has been increasing firmly. thus, the current highly accommodative financial conditions, brought about by yield curve control, have largely contributed to an improvement in the output gap, stimulating firms'and households'spending activities. in addition, the bank has purchased exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ) with a view to exerting positive effects on economic activity and prices through lowering risk premia in the stock market. as i explained, following the discussion at the latest mpm, the bank released its economic projections, which show that it will take more time than expected to achieve the price stability target of 2 percent. however, the momentum toward 2 percent inflation has been maintained. accordingly, as for the conduct of monetary policy, the bank judged it appropriate to persistently continue with the current powerful monetary easing, thereby maintaining the output gap as long as possible within positive territory, in order to make the momentum sustainable. during the discussion, we thought it necessary to address two challenges. the first is to firmly maintain confidence among the public regarding the bank's current policy stance that aims at achieving the price stability target of 2 percent. the second is to strengthen the sustainability of the current powerful monetary easing so that the effects of monetary easing will not be reduced while taking care of such factors as the negative effects on financial markets, in a situation where monetary easing needs to be continued. in order to address these two challenges, the bank decided to newly implement measures to strengthen the framework of powerful monetary easing.