In corporate finance, the fund-raising environment has not changed significantly, that is, the environment for firms, particularly with high credit risks, remains severe, although slight improvements are observed such as in the issuing environment of corporate bonds and CP.
In corporate financing, the fund-raising environment had not changed significantly, although slight improvements had been observed, such as in the issuing environment of corporate bonds and CP. The fund-raising environment overall for firms, particularly with high credit risk, remained severe.
The Bank will continue to conduct monetary policy appropriately in accordance with the changes in economic and price conditions to provide support from the financial side for the good performance of the Japanese economy over the long term.
It is desirable that the Bank of Japan, based on its"A New Framework for the Conduct of Monetary Policy," will continue to support the economy from financial aspects by implementing effective monetary policy management, while taking market conditions into account.
In order to sustain this cycle for strengthening the economy's growth potential, it is necessary to help private economic entities to realize their potential to the fullest. In addition to support from the financial side, it is therefore important to build an economic environment where innovations in a broad sense-- including the development of new business models-- can be achieved more easily.
Clearly recognizing this, and taking into account the fact that the issue facing Japan is one of declining growth expectations, which in turn considerably contributes to the current fall in prices, the Bank concluded that it should use the central banking functions it is endowed with to help strengthening the growth foundations of Japan's economy from the financial side.
While keeping such a mechanism in mind, on a number of occasions, I have been emphasizing that in order for Japan's economy to overcome deflation and return to a sustainable growth path with price stability, we need two things: first, having a wide range of economic agents exert efforts to strengthen the economy's growth potential; and second, support from the financial side.
However, taking into account that the diminished growth potential of the economy is one of the fundamental problems underlying deflation in Japan, the Bank concluded that an effective way to use its functions as the central bank was to provide support to strengthen Japan's future foundations for economic growth from the financial side.
Looking at the financial conditions on which the above outlook is based, short- and long-term real interest rates are assumed to be in negative territory throughout the projection period as the Bank pursues"QQE with Yield Curve Control." 5 Financial institutions' proactive lending attitudes, as well as favorable conditions for corporate bonds and CP issuance, are both likely to be maintained and support firms' and households' activities from the financial side.
Looking at the financial conditions on which the above outlook is based, short- and long-term real interest rates are assumed to be in negative territory throughout the projection period as the Bank pursues"Quantitative and Qualitative Monetary Easing(QQE) with Yield Curve Control."5 Financial institutions' active lending attitudes, as well as favorable conditions for corporate bonds and CP issuance, are both likely to be maintained and support firms' and households' activities from the financial side.
If they fail to obtain sufficient funds, financial markets could destabilize due to heightened uncertainty, which could eventually adversely affect economic activity.3 To prevent such a situation, the Bank has been providing ample liquidity since immediately after the earthquake, striving to ensure financial market stability by maintaining a sense of security on the funding front, and trying to avoid adverse effects on corporate activity and people's daily lives from the financial side.
The Bank had been maintaining an accommodative financial environment by encouraging the uncollateralized overnight call rate to remain at effectively zero percent since the termination of the quantitative easing policy, taking consistency with the government's basic policy for the economy fully into consideration. The government would like to request that the Bank, in its future conduct of monetary policy, continue its policy efforts to overcome deflation together with the government and support the economy from the financial side responsibly.
English
中文
عربى
Български
বাংলা
Český
Dansk
Deutsch
Ελληνικά
Español
Suomi
Français
עִברִית
हिंदी
Hrvatski
Magyar
Bahasa indonesia
Italiano
Қазақ
한국어
മലയാളം
मराठी
Bahasa malay
Nederlands
Norsk
Polski
Português
Română
Русский
Slovenský
Slovenski
Српски
Svenska
தமிழ்
తెలుగు
ไทย
Tagalog
Turkce
Українська
اردو
Tiếng việt