japan's financial system has maintained stability on the whole. although attention is warranted on, for example, the impact of the tightening of global financial conditions, the financial system is likely to remain highly robust on the whole, even in the case of an adjustment in the real economy at home 1 / 2 bis - central bankers'speeches and abroad and in global financial markets, mainly because japanese financial institutions have sufficient capital bases. regarding financial risks from a longer - term perspective, while there is a possibility that prolonged downward pressure on financial institutions'profits may lead to a gradual pullback in financial intermediation, the vulnerability of the financial system could increase, mainly due to the search for yield behavior. although these risks are judged as not significant at this point, it is necessary to pay close attention to future developments. ii. conduct of monetary policy next, i will explain the bank's conduct of monetary policy. the bank considers that sustainable and stable achievement of the price stability target is not yet envisaged with sufficient certainty at this point, and that it is important to closely monitor whether a virtuous cycle between wages and prices will intensify. in this situation, it will patiently continue with monetary easing under quantitative and qualitative monetary easing ( qqe ) with yield curve control, aiming to support japan's economic activity and thereby facilitate a favorable environment for wage increases. in october, the bank decided to conduct yield curve control with the upper bound of 1. 0 percent for 10 - year japanese government bond ( jgb ) yields as a reference and to control the yields mainly through large - scale jgb purchases and nimble market operations. this decision was based on the assessment that it was appropriate for the bank to increase the flexibility in the conduct of yield curve control. the bank will conduct monetary policy with the aim of achieving the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases. thank you. 2 / 2 bis - central bankers'speeches

are virtually level. meanwhile, stock prices have been declining since the start of september in line with a decline in u. s. and european stock prices, as more investors preferred to hold off buying stocks. stock prices are mainly moving around 9, 000 - 9, 500 yen recently. in the foreign exchange market, the yen, after being fluctuating without trend until early september, dropped in mid - september. it is currently being traded in the range of 122 - 123 yen to the u. s. dollar. with regard to corporate finance, private banks remain cautious in extending loans to firms with high credit risks while they continue to be more active in extending loans to blue - chip companies. the lending attitudes of financial institutions as perceived by firms continue to be severe. in the corporate bonds and cp markets, the issuing environment for firms with low credit ratings is still severe, but the environment for firms with high credit ratings is accommodative. credit demand in the private sector continues to follow a downtrend mainly because firms are decreasing their business fixed investment while continuously reducing their debts. amid these developments, private banks ’ lending continues to decline by about 2 - 3 percent on a yearon - year basis. the amount outstanding of corporate bonds and cp issued is recently moving near the previous year ’ s level. the monetary base increased substantially — by around 20 - 30 percent — from the previous year ’ s level. the year - on - year growth rate of the money stock remained around 3. 5 percent. funding costs for firms continue to be at extremely low levels on the whole. overall, the recent financial environment remains extremely easy on the whole in terms of money market conditions. the deterioration in the financing situation of firms has come to a halt. however, the stance of investors toward firms with high credit risks remains severe and the lending attitudes of private banks remain cautious. hence, the developments in the behavior of financial institutions and corporate financing continue to require close monitoring.