5 - 1. 8 - 18. 4 - 5. 9 1. 7 7. 4 q3 q4 2. 8 - 4. 0 - 6. 1 0. 4 - 3. 0 3. 3 5. 9 - 3. 3 0. 8 capital goods 5. 3 - 5. 5 motor vehicles and related goods 5. 7 it - related goods real exports s. a., m / m % chg. s. a., q / q % chg. q2 q1 june july source : bank of japan, " developments in real exports and real imports. " c. recent developments and outlook for prices next, i will move on to price developments. the observed year - on - year rate of change in the consumer price index ( cpi ) for july 2020 was 0. 0 percent for all items less fresh food and 0. 4 percent for all items less fresh food and energy. excluding the effects of the consumption tax hike and the introduction of free preschool education, the figures were minus 0. 3 percent and plus 0. 2 percent, as shown on the left - hand side of chart 11. the inflation rate remained lower than before, reflecting the tax hike in october 2019, a decrease in demand against the background of the spread of covid - 19, and a drop in energy prices. the right - hand side of the chart shows that the indicators representing underlying changes in consumer prices have also continued to show relatively weak developments. turning to the outlook for prices, according to the medians of the policy board members'forecasts presented in the july 2020 outlook report, the year - on - year rate of change in the cpi ( all items less fresh food ) is expected to increase gradually from minus 0. 5 percent for fiscal 2020 to 0. 3 percent for fiscal 2021, and to 0. 7 percent for fiscal 2022, as shown in chart 4. if we look at the output gap and medium - to long - term inflation expectations, both of which affect the underlying changes in prices, the output gap, shown on the left - hand side of chart chart 11 consumer prices consumer price index 2. 0 underlying trend in inflation y / y % chg. 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 - 0. 5 - 0. 5 - 1. 0 - 1. 0 cpi ( all items less fresh food ) - 1. 5 note

of japanese banks2 in fiscal 1996 amounted to ¥6. 4 trillion, 5 percent lower than in the previous year. this decline reflects a decrease in the net bond - related 1 “ operating profits ” signifies earnings from core banking operations, arrived at by subtracting “ general loan - loss provisions, ” “ general and administrative expenses ” and “ expenses for debenture issuance ” from the total of “ net interest income ” ( e. g., interest received / paid ) for loans and profits and in the net interest income of city banks. excluding a temporary factor3 which contributed to an increase in profits on trust accounts, the decline in operating profits from the previous year was about 10 percent. loan write - offs and loan - loss provisions4 marked approximately ¥7. 6 trillion ( including trust accounts ), which is the second highest level following fiscal 1995 when the jusen ( housing loan companies ) were liquidated. this suggests that most banks continued to give high priority to solving the problem of nonperforming loans. net stock - related profits5 were no more than about ¥1. 0 trillion, approximately ¥2. 9 trillion lower than the fiscal 1995 level, due to substantial stock write - downs resulting from the fall in stock prices. this reflects the fact that banks ’ balance sheets have become more exposed to volatility in stock prices because of a rise in the book values of stocks which resulted from recent cross transactions - - sets of purchases and sales transactions on the same stocks in order to acquire unrealized capital gain. as the loan write - offs and loan - loss provisions virtually matched the total of operating profits and stock - related profits, recurring profits and net income reached close to zero levels, although this represented an improvement from the previous year. on the relationship between monetary aggregates and economic activities in japan : a study focusing on long - term equilibrium relationships introduction this paper empirically analyzes the relationship between monetary aggregates and economic activities in japan using actual data and focusing on long - term equilibrium relationships. long - term time - series data from the 1960s to 1996 are used in the analysis in order to observe long - term relationships between the most commonly used monetary aggregate, m2 + cds, and macroeconomic indicators, such as gdp, rather than limiting the analysis to short - term relationships during the past year or two. 1 in addition to long - term relationships, the discounts, deposits and securities ), “ net fee and commission income ” ( e. g.