Thank you. That's a very important question.
Since our last MPR, there has been a major shift in the policy stance in Japan. There's been a fiscal expansion of a little more than two percentage points, and they have moved to a 2% inflation target. The monetary policy framework previously had a less than 2% inflation target. There has been some concern that, associated with those major, very positive developments in macro policy, Japanese authorities were targeting a certain level of the exchange rate. There have been discussions at the G-7 about this. I'm sure there will be discussions this weekend at the G-20. A statement has been released, which I referenced earlier, based on those discussions, and the crucial point that we make here in Canada—which the Japanese authorities have agreed to acknowledge—is that monetary policy is focused on domestic outcomes. So if you're focusing on the 2% inflation target, you're targeting that domestic outcome, not the exchange rate.
That said, monetary policy has consequences for the exchange rate, all other things being equal, and if monetary policy is looser and more accommodating than it was previously, as it will be in Japan, as it is in Japan, given that they have raised the target for inflation materially, that will have consequences for the exchange rate. But the important thing is to stay focused on the medium term. That's why, because of those major policy changes and because Japan is still the third-largest economy in the world, we highlighted more detail.