in contrast, the bank ’ s primary mandate is to achieve price stability and there is relatively small concern about the unemployment rate. in fact, the unemployment rate for december 2013 reached 3. 7 percent, close to the lowest point in recent years of 3. 6 percent, which was attained in july 2007. some labor issues exist, such as the differential treatment of regular and non - regular workers and firms ’ demand for increased flexibility over labor market regulations. however, these are structural issues that are beyond the scope of monetary policy. iii. communication and challenges faced by the bank as you may know, japan ’ s economy is performing relatively well and the core cpi turned positive in june 2013 and reached 1. 3 percent in december 2013. together with expansionary fiscal measures and a front - loaded increase in consumption, qqe has other assets include exchange - traded funds ( etfs ), japan real estate investment trusts ( j - reits ), cp, and corporate bonds. the bank has also charged 0. 1 percent on excess reserves since october 2008. thus, this interest rate functions largely as a floor for the interbank market interest rates. bis central bankers ’ speeches contributed to the favorable performance. that said, i will present my own views on some possible communication - related challenges that the bank may face in the future. maintaining low levels of real interest rates and communicating with the markets one clear achievement of qqe ( and of the anticipated greater monetary easing from the end of 2012 ) is that long - term real interest rates turned negative and have remained in negative territory ( chart 5 ). this reflects two factors. one factor is the continuous downward pressure being exerted on long - term nominal interest rates. chart 6 shows that upward pressure on long - term interest rates remains limited to date, since the massive purchases of jgbs have helped to generate strong downward pressure on interest rates. the chart shows the decomposition of key factors contributing to long - term jgb yields. it indicates that in recent months downward forces caused by “ other factors ” ( which seems to largely reflect domestic factors ) have been greater than upward pressure caused by “ common factors ” ( which largely reflects global factors ). another factor is an increase in long - term inflation expectations since late 2012. chart 7 shows survey - based indicators ( such expectations of households, economists, and market participants ), while chart 8 shows market data - based indicators. these indicators show a general increase in inflation expectations. however, they require caution in interpretation

quantity ” could easily be connected to a large - scale supply of cash, creating an image of inflation. moreover, market participants use the monetary base as a reference for measuring the scale of monetary easing across central banks when engaging in financial transactions. certain academic research studies were also taken into account in regard to the bank ’ s adoption of monetary base targeting. 3 moreover, there was general agreement among the policy board members the size of the asset purchase program was increased nine times, each time in the range of 5 – 10 trillion yen. the purchase of jgbs was mainly up to a remaining maturity of three years. this often refers to the exit timings of the zero interest rate policy in august 2000 and quantitative monetary easing in march 2006. these research studies, including those related to the bank ’ s monetary policy, include paul r. krugman, “ it ’ s baaack : japan ’ s slump and the return of the liquidity trap, ” brookings papers on economic activity, 1998, 2, pp. 137 – 205 ; allan h. meltzer, “ the transmission process, ” paper presented to the deutsche bundesbank bis central bankers ’ speeches that changing the main operating target would effectively signal a much - needed change in the monetary policy framework and enable the bank to wipe away its image as a reluctant monetary accommodator. hence, the shift was decided as part of the bank ’ s communication policy tool. the purchase of japanese government bonds ( jgbs ) was viewed as the main tool to fulfill the monetary base target. the bank now purchases jgbs with a remaining maturity from a minimum of less than one year up to the maximum 40 years. importance of raising long - term inflation expectations here, i should also mention that qqe relies more heavily on long - term inflation expectations to achieve negative long - term real interest rates than the monetary policies adopted by other central banks. a decline in long - term interest rates in real terms may increase investment and consumption. the anticipation of higher inflation may hasten such increases. these expectations may also affect current sales prices and wages. thus, the bank decided to use all available tools to convince the markets and the public of its strong determination to overcome mild deflation and to help transform the deflation - oriented mindset. in this spirit, the “ quantity ” - based targeting approach was considered reasonable. this feature draws a clear line between qqe and the previous cme, which placed little emphasis on