that means to resolve the disparity between supply and demand in a sustainable manner. based on such a viewpoint, the bank has been implementing drastic monetary easing. the target level of the policy rate, an overnight interest rate, was reduced to 0. 1 percent in december 2008 and has remained there since then. the 0. 1 percent level of effectively zero interest rate is currently the lowest policy rate among central banks around the globe. moreover, in december 2009, the bank introduced a new funds - supplying operation to encourage a further decline in longer - term interest rates in the money market through provision of ample funds. as a result, the effectively zero interest rate is spreading to funds with even longer maturities. through implementing those measures, the bank aims at preparing an extremely accommodative financial environment and thereby promoting firms ’ capital investment and household consumption. the other approach is to prevent people ’ s view on prices from worsening. in that regard, the bank further clarified the stance that it is important to achieve a state that the year - on - year rate of change in the cpi is positive. that is part of the approach to stabilizing people ’ s view on prices. for japan ’ s economy to overcome deflation and return to a sustainable growth path with price stability, the bank will continue to consistently make contributions. and, if judged necessary, due, for example, to economic and price developments as well as changes in financial conditions, the bank is always prepared to implement appropriate measures at an appropriate timing. moreover, as for the other medium - to long - term challenge of exploring a long - term vision of japan ’ s economy, the best contribution the bank can make as a central bank will be to support the economy in achieving a sustainable growth with price stability. the bank will strive to achieve economic and price conditions in which there is little future uncertainty, so that firms can actively expand their business with confidence. concluding remarks i have been explaining japan ’ s economic conditions and the challenges confronting japan. to conclude, let me talk about my impression about kagoshima ’ s economy. kagoshima ’ s industrial structure may be characterized by the fact that the weight of exportrelated firms are little, compared with the national average, while that of the agriculture, forestry, and fisheries industry and the construction industry is considerable. for that reason, it might perhaps be difficult to feel the pick - up in the economy originating from exports. in fact, i have been informed that, through

at the snb, many money and capital market interest rates start with a minus sign rather than a plus. for instance, yields on confederation bonds with terms of up to ten years are currently negative. so, mathematically speaking, the parameters have indeed shifted. but what is important for the swiss franc, and thus for the swiss economy, is not domestic interest rates in an absolute sense, but relatively speaking – i. e. the differential between swiss and foreign interest rates. historically, swiss nominal interest rates have tended to co - move with those in other countries, albeit usually at lower levels, especially when compared to the euro area. the comparatively low interest rates in switzerland are, first, the result of low and stable inflation. second, they provide incentives for capital outflows, which are the counterpart of the traditional current account surplus. since the financial crisis, interest rates have dipped towards the zero lower bound in many advanced economies, so that this classic rate differential has virtually disappeared. in order to re - establish a clear differential, the snb has lowered its reference interest rate into negative territory, exerting downward pressure on the entire swiss interest rate curve. as chart 3 shows, using yields from swiss and german five - year government bonds, since then the interest rate differential to other countries has widened again. similar developments can also be observed for all other bond maturities. thus, the situation as regards the interest rate differential has not changed since 15 january ; rather, it has partly normalised thanks to the negative interest rate. so the introduction of negative interest achieved an important objective. lower interest rates make swiss franc investments less attractive compared to foreign investments. of course, the interest rate differential is not the only factor behind the demand for swiss francs. for this reason, it is not always easy to determine when, and how strongly, it will influence the swiss franc exchange rate. however, if all other factors remain the same, there is less demand for investments in switzerland – and thus for swiss francs – when swiss interest rates decline. bis central bankers ’ speeches but i am also aware that negative interest rates do not constitute business as usual. in addition to the interest rate differential, nominal interest rates will themselves also return to normal. for this to happen, economic conditions abroad will need to improve to the point that interest rates in switzerland can rise without causing the swiss franc to strengthen further. this is currently not the case. at the most recent monetary policy assessment, we decided to