a collection of individual board members ’ views, did not represent the “ price stability ” that is the basis of the policy decisions of the bank as an institution. in addition, there was some difficulty with the word “ understanding ”, in that it failed to deliver the message that the bank was making active moves toward price stability. taking account of these problems, the policy board members have made a collective decision on how to express the price stability that the bank should aim to achieve. they have also decided to use the word “ goal ”, so that the bank ’ s policy stance can be understood clearly. i would like to point out that there is a notable feature in the introduction of the “ goal ”. that is, the “ goal ” for the time being is set differently from the “ goal ” from a longer - term perspective. the bank has decided to set a specific inflation rate goal for the time being – a rate that it currently aims to achieve – even though there is considerable uncertainty surrounding the prospects for japan ’ s economy, such as in terms of changes in economic structures. at the bis central bankers ’ speeches same time, from a longer - term perspective, if the efforts to strengthen growth potential successfully boost real growth rates to an adequate level in a sustainable manner, then the medium - to long - term sustainable inflation rate – and consequently, the nominal growth rate – will gradually rise. bearing in mind such a possibility from a longer - term perspective, the board has decided to express “ the goal for price stability in the medium to long term ” with a degree of latitude as “ a positive range of 2 percent or lower in terms of the year - on - year rate of change in the cpi ” and to review the “ goal ” once a year in principle. as long as the bank ’ s thinking behind the “ the price stability goal in the medium to long term ” is shared correctly, it is not essential to argue about what it should be called. i feel no discomfort in referring to the “ goal ” as a flexible inflation target. b. question : was the policy change in february based on the assessment from the “ two perspectives ”? next, let me take up the issue of how difficult it was to predict the february decision to enhance monetary easing. since march 2006, in deciding the conduct of monetary policy, the bank has been examining economic activity and prices from two perspectives. the first is in terms of whether the baseline scenario of the outlook for economic activity and prices follows a

have been volatile against the backdrop of the further decline in crude oil prices and uncertainty such as over future developments in emerging and commodity - exporting economies, particularly the chinese economy. for these reasons, there is an increasing risk that an improvement in the business confidence of japanese firms and conversion of the deflationary mindset might be delayed and that the underlying trend in inflation might be negatively affected. in order to preempt the manifestation of this risk and to maintain momentum toward achieving the price stability target of 2 percent, the bank introduced “ quantitative and qualitative monetary easing ( qqe ) with a negative interest rate ” in january 2016. the bank will lower the short end of the yield curve by slashing its deposit rate on current accounts into negative territory and will exert further downward pressure on interest rates across the entire yield curve, in combination with continued large - scale purchases of japanese government bonds ( jgbs ). the jgb yield curve has declined after the introduction of “ qqe with a negative interest rate, ” bis central bankers ’ speeches and policy effects have been seen. going forward, these effects are likely to steadily spread to both the real economy and the price front. the bank will continue with “ qqe with a negative interest rate, ” aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. it will examine risks to economic activity and prices, and take additional easing measures in terms of three dimensions – quantity, quality, and interest rate – if it is judged necessary for achieving the price stability target. in global financial markets, risk aversion of investors has been spreading excessively around the globe recently. the bank will carefully monitor how the developments in global financial markets influence japan ’ s economy and prices. thank you. bis central bankers ’ speeches