Recent price rises were stronger than previously projected and inflation expectations were moving up, a sign the economy is getting closer to achieving the bank's 2% inflation target.

The economy was beginning to see a mix of cost-push inflation and price gains driven by domestic demand.

The pass-through of rising imported goods prices is broadening with a lag. But other factors may also be playing a part such as labor shortages, strong domestic demand, and changes in corporate price-setting behavior.

We believe the pass-through from rising imported goods prices is still a dominant factor, but need to scrutinize the contribution of newly emerging factors that are pushing up prices.

Recent rises in consumer inflation in Japan are much more modest than in the United States or Europe, but fairly stronger than previously expected.

We're not seeing any sign of risk that Japan would experience the kind of high inflation seen in the United States and Europe but the economy is a living thing.

We need to humbly look at how various factors come into play.

We need to carefully interpret the messages coming out from markets.

As for how we would respond with policy, it would be a comprehensive decision looking at the baseline scenario and risks surrounding the economy, prices and financial developments.