8 real gdp developments in advanced economies after the global financial crisis s. a., 2007 / q1 = 100 japan united states euro area united kingdom cy 07 sources : cabinet office ; haver. chart 9 economic and price developments after the introduction of quantitative and qualitative monetary easing ( qqe ) corporate profits and business fixed investment exchange rates and stock prices thous. yen yen / u. s. dollar yen / u. s. dollar ( left scale ) nikkei 225 stock average ( right scale ) introduction of qqe cy10 unemployment rate 5. 5 ratio of current profits to sales ( left scale ) private non - residential investment ( sna, real, right scale ) nominal wages and prices s. a., % y / y % chg. 5. 0 4. 5 4. 0 - 1 3. 5 - 2 3. 0 2. 5 cy 10 s. a., ann., tril. yen s. a., % 6. 5 6. 0 5. 5 5. 0 4. 5 4. 0 3. 5 3. 0 2. 5 2. 0 cy10 hourly cash earnings cpi ( all items less fresh food and energy ) - 3 - 4 cy10 sources : bloomberg ; ministry of finance ; cabinet office ; ministry of health, labour and welfare ; ministry of internal affairs and communications. chart 10 current economic activity in japan indicators related to private consumption s. a., cy 2010 = 100 consumption activity index ( real ) cy13 s. a., di cy 13 economy watchers survey ( di for current economic conditions ) indicators related to exports and industrial production s. a., cy 2010 = 100 cy13 s. a., cy 2010 = 100 cy13 note : the consumption activity index is adjusted for travel balance. sources : bank of japan ; ministry of finance ; cabinet office ; ministry of economy, trade and industry. real exports indicies of industrial production

market its assessment of economic conditions and its views on the appropriate conduct of monetary policy. bearing this in mind, it is useful to incorporate an expected future change in the policy interest rate and its anticipated influence on the economy into the outlook for economic activity and prices that the central bank makes public. in the past, the bank's outlook for economic activity and prices was based on the assumption of a " fixed monetary policy, " in other words, it hypothesized that its monetary policy would be unchanged. since the april 2006 outlook report, however, the bank's outlook for economic activity and prices has been produced taking account of forecasts of the future policy interest rate embodied in market interest rates, instead of assuming that the policy interest rate will remain unchanged. a number of other central banks that publish an economic and price outlook, such as the bank of england ( boe ) and the european central bank ( ecb ), have started to use market participants'projections of the policy interest rate as the assumed policy interest rate when producing their outlooks. c. transmission lags lastly, i would like to take up the issue of the so - called transmission lag, the time lag between a monetary policy action and its impact on the economy. it takes a certain amount of time for the effects of a monetary policy action to filter through into the economy and prices. among the various transmission channels mentioned earlier, the effects of a change in interest rates on expected rates of return on investment may be felt within a relatively short period of time. transmission through foreign exchange rates and asset prices may also take place swiftly. it takes time, however, for an interest rate change to affect household income through corporate profits. considerably more time is then required for a change in corporate profits and household income to gradually alter firm and household sentiment and hence impact on consumption and investment decisions. for a policy change to be fully transmitted through to the economy, therefore, requires a considerable amount of time even when firms and households are rational and forward - looking. there are then still further lags between the change in the economic situation and the eventual impact on prices. it is such lags in policy transmission that necessitate a forward - looking approach to conducting monetary policy. for policy actions to be effective, it is necessary to act based on the outlook for economic activity and prices over a sufficiently long term. in the quarterly bulletin of the boe, for example, the economic and price outlook of monetary policy committee members