favorable " " unfavorable " - 10 - 2 - 20 - 30 - 4 - 40 - 6 - 50 - 8 cy90 92 94 96 98 00 02 04 06 08 10 12 14 16 17 - 60 cy 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 notes : 1. figures for the output gap are based on boj staff estimations. 2. figures for the business conditions di are those for all industries and enterprises. there is a discontinuity in the data in december 2003 due to a change in the survey framework. source : bank of japan. chart 3 corporate sector developments in business fixed investment plans ( tankan ) exports s. a. y / y % chg. fy 2016 fy 2017 fy 2018 average ( fy 2004 - 2016 ) real exports ( cy 2015 = 100 ) cy 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 - 2 mar. survey june survey sept. survey dec. survey forecast actual note : the right chart indicates the revision patterns of fixed investment plans. the horizontal axis represents the point of time when the survey is conducted for each fiscal year. namely, the first survey for each year ( march survey ) is on the left, and the last survey ( june survey of the following year ; actual result ) is on the right. the vertical axis represents the year - on - year percent change. all industries including financial institutions. including software and r & d investment and excluding land purchasing expenses ( r & d investment is not included up until the december 2016 survey ). there is a discontinuity in the data in december 2017 due to a change in the survey sample. sources : bank of japan ; ministry of finance. chart 4 household sector private consumption employee income y / y % chg. - 2 s. a., cy [UNK] total cash earnings - 4 number of employees - 6 consumption activity index ( travel balance adjusted, real ) employee income cy10 - 8 06 07 08 09 10 11 12 13 14 15 16 17 notes : 1. for employee income, q1 = march - may, q2 = june - august, q3 = september - november, q4 = december - february. notes : 2. employee income = total cash earnings ( " monthly labour survey " ) × number of employees ( " labour force survey " ) 3. figures for the consumption activity index exclude inbound tourism consumption and include outbound tourism

stance becomes more proactive, inflation expectations may not rise smoothly ; in other words, the second step of the mechanism may not operate fully. past experience suggests that there is a certain time lag before actual inflation affects inflation expectations and the length of this lag is highly uncertain. so far, there has not been enough academic literature on the learning process through which firms and households revise their inflation expectations upward when faced with actual price rises. taking into consideration that the experience of 15 years of deflation had become deeply entrenched in people's mindset and behavior, we need to keep in mind that it might take a fair amount of time before actual inflation starts to affect inflation expectations. thus, in a situation where there are various risks and uncertainty is high, with a view to making an assessment of the outlook for prices and being accountable for this, it would not be proper - - and not represent adequate information dissemination by the bank - - to attract excessive attention merely to forecast figures. as also highlighted by federal reserve chairman powell, it is difficult to make accurate forecasts about future economic developments, and too much emphasis should not be placed on the medians of board members'forecasts. regarding the timing of the year - on - year rate of change in the cpi reaching around 2 percent, up until the previous january 2018 outlook report, the bank provided specific descriptions such as that this would likely be around fiscal 2019 ; however, the latest report does not include such descriptions. the bank believes that giving a detailed and articulate explanation on price developments based on a comprehensive assessment - including the mechanism through which the year - on - year rate of change in the cpi increases toward 2 percent and the assessment of risks - - leads to more appropriate communication to the public. iii. the conduct of monetary policy let me now turn to the bank's conduct of monetary policy. the bank has been pursuing powerful monetary easing with a view to achieving the price stability target of 2 percent. specifically, under the framework of " qqe with yield curve control " introduced in september 2016, it facilitates the formation of the yield curve that is considered most appropriate for achieving the 2 percent target judged on the basis of developments in economic activity and prices as well as financial conditions. at the mpm held at the end of last month, the bank maintained the guideline for market operations, in which the short - term policy interest rate is set at minus 0. 1 percent and the target level of the 10 - year