tax hikes ) is likely to be at around 0 percent for the time being, lower than that in the july 2015 interim assessment. after that, the rate of increase in the core cpi is projected to accelerate toward 2 percent as the underlying trend in inflation steadily rises and the effects of the decline in crude oil prices dissipate. although the timing of reaching around 2 percent depends on developments in crude oil prices, this is projected to happen around the second half of fiscal 2016, assuming that crude oil prices will rise moderately from the recent bis central bankers ’ speeches level. thereafter, japan ’ s economy is expected to gradually shift to a growth path that sustains such inflation in a stable manner ( chart 1 ). regarding my outlook for prices, let me first present an overall picture. although the mechanism of the price rises i assume is the same as that in the bank ’ s baseline scenario, my projections remain more cautious than the median of the policy board members ’ forecasts. the outlook throughout fiscal 2017 was revised somewhat downward. currently, my projection is that the rate of increase in the core cpi is likely to rise closer to around 2 percent “ from the end of fiscal 2016 to early fiscal 2017 ” – a delay of about a quarter from my previous projection of “ toward the end of fiscal 2016. ” let me explain my outlook in some detail. my projection for prices for fiscal 2015 is that the core cpi will be at around 0 percent. the slight downward revision from the july 2015 interim assessment is attributable to the decline in crude oil prices. also, the delay in the pace of the output gap improvement was taken into account as the actual output gap deteriorated in the april - june quarter. my projection for fiscal 2016 that the core cpi inflation will rise to a little over 1 percent is rather cautious compared to that presented previously. this reflects ( 1 ) the remaining effects of the drop in energy prices, ( 2 ) a delay of about a quarter in terms of the timing for the output gap to turn positive, and ( 3 ) a delay in the timing for inflation expectations to begin rising owing to a slower pace of increase in prices. thereafter, the rate of increase in the core cpi will accelerate and reach around 1. 7 – 1. 8 percent, or rise closer to around 2 percent from the january - march quarter of 2017 ( the peak of the front - loaded increase in domestic demand ) to the april - june quarter ( the period most likely to see an opportuni

those of firms. households tend to perceive that prices are always rising and they always keep positive inflation expectations even under a mild deflationary phase or a very slight inflationary phase ( chart 5 ). this suggests the presence of an upward bias in inflation expectations. on this point, i have delivered several speeches abroad in the past and have suggested that the scale of upward bias appears to be generally greater in japan than in europe and the united states. 2 given the past long - standing stagnant wages, households appear to have formed an expectation over time that future wages will always decline. this has led households to anticipate tighter budgets, and such strong defensive action has resulted in a larger upward bias in their inflation expectations. in this environment, it is important for households to form a perception that wages will increase steadily and that such an increase will continue ; indeed, wages are currently improving moderately. in addition, at present, a further monetary policy action is unnecessary given that current sluggish movements of the core cpi caused by a decline in energy prices are temporary, and that a decline in production costs and the resultant improvement in corporate profits might enhance the opportunity for firms to raise wages more readily. based on these five viewpoints, it is time to closely monitor whether prices will exhibit a rising trend under the current accommodative monetary easing environment. if such a path toward price rises does not materialize at all, the bank – depending on the causes – may consider some adjustments with regard to the monetary policy. this brings me to the end of my speech. thank you very much indeed for your kind attention. for recent speeches, see sayuri shirai, “ monetary policies in a diversifying global economy : japan, the united states, and the asia - pacific region, ” remarks at the panel discussion organized by the federal reserve bank of san francisco, bank of japan, 2015, and sayuri shirai, “ unconventional monetary policies of the bank of japan and european central bank, ” remarks at the panel discussion at the bruegel annual meeting, bank of japan, 2015. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches