us to reverse our monetary policy stance at the first signs of a recovery of the financial sector. conclusion ladies and gentlemen, i have highlighted some aspects that lie at the heart of each and every central bank engaged in forecasting, and i have mentioned a number of issues that are particularly relevant to the state of play in the eurosystem in general and the bundesbank in particular. i hope that our conference will help stimulate further research into forecasting. the diversity of modelling approaches as well as their empirical testing enriches the wealth of experience see knuppel, m and g schultefrankenfeld ( 2008 ), how informative are risk forecasts? an examination of the bank of england ’ s risk forecasts, bundesbank discussion paper 14 / 2008. available to monetary policymakers. this helps to draw further conclusions for a robust and successful monetary policy in a continuously evolving economic landscape and, hence, helps to maintain price stability in the long run. thank you for your attention.

captures domestic consumer prices of goods and services - - for all items excluding fresh food has been at around 0 percent recently, despite the rise in energy prices. this is notably low considering that the year - on - year rate of increase in consumer prices has been at around 6 percent in the united states and around 5 percent in europe. what lies behind the weak consumer prices in japan are structural factors unique to the country, in addition to the slower recovery in demand compared with the united states and europe, mainly for private consumption. unlike firms in the united states and other countries, japanese firms continued to hoard their regular workers in particular even during the pandemic, while making use of such programs as employment adjustment subsidies. this suggests that they have the capacity to swiftly expand supply of products and services in response to a recovery in demand. in addition, a mindset and behavior based on the assumption that prices will not increase easily have remained deeply entrenched among firms and households in japan due to their experience of deflation in the past. nevertheless, the underlying inflationary pressure has been increasing in japan, albeit gradually ( chart 7 ). for instance, mobile phone charges alone have pushed down the rate of change in the overall cpi by about 1. 5 percentage points, mainly because major carriers launched low - cost mobile phone plans this spring. when excluding such temporary factors, the rate of change in the cpi seems to be increasing moderately in positive territory. meanwhile, japanese firms'price - setting stance is starting to change. looking at firms'stance regarding input and output prices in the tankan, there have been times in the past when firms found it hard to raise output prices even when input prices rose. however, this seems to have become less prevalent recently ; that is, there has been an increasing number of firms that are passing on the increase in input costs to output prices, including in overseas markets where demand has been steady. while there has been an established practice among firms in the basic materials industry, such as steel firms, to pass on a certain ratio of increase in input costs to output prices, attention is needed on the extent to which this practice will spread to other industries. iii. financial conditions surrounding firms and the bank's conduct of monetary policy financial conditions i would now like to explain the bank's conduct of monetary policy ( chart 8 ). let me first describe japan's financial conditions surrounding firms, the starting point of the transmission channel of the effects of monetary policy. immediately after