a supply system including building production lines of portable terminals. as a result, demand for cell phones increased explosively, and cell phones prevailed rapidly in a short period. consumers have now obtained the convenience of making phone calls any time at any place. also, profit opportunities for telecommunications firms and portable terminal manufacturers have increased, resulting in raising productivity of the economy as a whole. in tapping potential demand, high technology as represented by cell phones would not be the only key. in fact, there are not a few local firms that have succeeded in tapping potential demand by utilizing unique expertise, local specialty goods, and a home - court advantage. while the main players that make such efforts are business managers, as a factor to support such efforts, financial institutions also play a critical role. by focusing on that point, the bank has started a new policy initiative. in closing, let me move on to the bank ’ s conduct of monetary policy. iv. policy actions by the bank of japan the bank ’ s monetary policy since the lehman shock in 2008 can be summarized in three types. first, measures to repair financial markets in response to the financial crisis ; second, aggressive monetary easing in response to the economic plunge ; and third, a new approach toward strengthening the foundations for economic growth. various temporary measures to repair market function first, measures to repair the market function. having been affected by the global financial crisis since the autumn of 2008, the market functioning of japan ’ s financial markets also declined rapidly, although the overall market sentiment has been significantly stable compared with that in the united states and europe. the issuance of cp and corporate bonds became difficult and corporate funding became tight. to cope with such a rapid decline in market functioning, the bank promptly introduced various extraordinary measures such as outright purchases of cp and corporate bonds. subsequently, due partly to the coordinated actions of central banks, the global financial turmoil stabilized and the functioning of japan ’ s financial markets improved, and those measures have been phased out since the end of 2009. ensuing financial market developments illustrate that market transactions have rather become active after the completion of those measures. however, as i have mentioned earlier, due mainly to the fiscal problems in some european countries, strains increased in the u. s. dollar money market in may. therefore, the bank, in coordination with major central banks, re - established the u. s. dollar funds - supplying operations that were once completed in february 2010. including those fiscal and financial developments in europe, there remain the factors that

purchase of eco - friendly cars and the eco - point system for electrical appliances. therefore, induced by the improvement in overseas economic conditions, positive moves of increase in exports spreading to domestic private demand have gradually been seen. when we compare the recent real gdp growth rates on an annualized basis, they were 4. 6 percent for japan, 5. 6 percent for the united states, and 0. 5 percent for the euro area in the october – december quarter of 2009, and 5. 0 percent for japan, 2. 7 percent for the united states, and 0. 8 percent for the euro area in the january – march quarter of 2010, respectively. it might be surprising, but in fact the recent growth rate of japan ’ s economy has been, on average, the highest among the advanced economies. nevertheless, many might not realize that. there might be several factors in the background. although japan ’ s economy shows further signs of a moderate recovery, the level of economic activity has not sufficiently increased. or, since the recovery is export - led, depending on whether the benefits would spread directly, there are great differences according to regions and industries. perhaps the greatest factor might be that people are concerned about the fact that they cannot have future growth prospects for japan ’ s economy, or, in other words, it has become difficult to create a growth picture. while i will later talk about our views and policy responses on this issue, let me next explain price developments in japan as a topic closely related to the issue. prices as for prices in japan, the year - on - year rate of decline in the consumer price index ( cpi ) has been gradually slowing, after registering the largest decline of 2. 4 percent in the summer of 2009. a special one - off factor of subsidy for high school tuition has been pulling down the year - on - year rate of change in the cpi by around 0. 5 percentage points since april 2010, and the latest figure, excluding such effects, has showed that the rate of decline slowed to 0. 7 percent. there are mainly two factors behind the slowing pace of decline in consumer prices, namely the improvement in the aggregate supply and demand balance of the domestic economy as a whole, and an uptrend in commodity prices represented by crude oil prices. the aggregate supply and demand balance of the economy as a whole has been improving moderately since the spring of 2009. since the past experience tells us that, once the supply and demand balance starts to improve, its effects