that of the economic activity as a whole. however, stock prices remain unstable. in corporate finance, the fund - raising environment of firms with low credit risks is accommodative on the whole, but with regard to firms with high credit risks, the stance of investors is severe and the lending attitudes of private banks are becoming more cautious. hence, including the effects arising from government measures to accelerate the disposal of non - performing loans and to revitalize industries and firms, developments in the financial and capital markets, the behavior of financial institutions, and the situation of corporate finance continue to require close monitoring.

virtually unchanged for the time being while restraining forces such as excessive labor input and debt persist. furthermore, the downside risk on the outlook for the u. s. and other overseas economies continues to require attention, given that there are some uncertain factors including geopolitical developments and their economic implication. on the domestic side, stock prices remain unstable. hence, the progress in the disposal of non - performing loans and its effects on stock prices, corporate finance, and the economy, should be carefully monitored. on the price front, import prices are on the rise reflecting the earlier firmness in oil prices and depreciation of the yen. domestic wholesale prices turned up slightly due to the increase in import prices and the improved supply - demand balances in the materials industries, although machinery this report is based on data and information available at the time of the bank of japan monetary policy meeting held on december 16 and 17, 2002. the bank ’ s view of recent economic and financial developments, determined by the policy board at the monetary policy meeting held on december 16 and 17 as the basis for monetary policy decisions. prices and electricity charges are declining. however, consumer prices remain on a gradual downtrend and corporate services prices continue to decline. looking at the conditions influencing price developments, import prices are projected to be firm for the time being as the effects from the rise in oil prices and the depreciation of the yen still remains. however, the overall supply - demand condition is expected to keep exerting downward pressure on prices for a while amid persistently weak domestic demand, although the completion of inventory adjustment and the rise in capacity utilization rates will support prices to some degree. moreover, factors such as the ongoing technological innovations in machinery, deregulation, and the streamlining of distribution channels will continue to restrain prices. under these circumstances, domestic corporate goods prices, the new price indicator which will replace domestic wholesale prices from december, are expected to be virtually level for a while. consumer prices are expected to stay on a declining trend for the time being at the current gradual pace. while the growth in imports of consumer goods has stalled and thus is expected to alleviate the downward pressure on prices to some extent, the faster pace of decline in wages may possibly reinforce the ongoing decline in prices, especially for services prices. as for the financial environment, the outstanding balance of the current accounts at the bank of japan is recently moving at around 20 trillion yen, as the bank provides further ample liquidity. under these circumstances