##dative financial environment. additionally, land price adjustments have advanced, especially in major cities, and the increase in housing - related investment, among others, is another factor contributing to the rise in bank lending. future risk factors of course, there are certain risk factors for the economic outlook. the bank is paying particular attention to the rise in crude oil prices and the developments in overseas economies. crude oil prices marked a record high around the end of august 2005 ( about 70 u. s. dollars / barrel for wti crude oil ) following the hurricane damage in the united states, and have softened somewhat recently, but remain at a rather high level. the rises in crude oil prices in recent years are largely attributable to increased global demand, reflecting developments such as high growth in emerging economies. therefore, high crude oil prices may be compatible with the expansion of the global economy if both oil - producing countries and oil - consuming countries take adequate actions to deal with increased demand. nevertheless, as demonstrated by the rapid increase in crude oil prices with the u. s. hurricane damage through the end of august, there is some risk that crude oil prices may shoot up to a level that is not compatible with the demand increase accompanying the expansion of the global economy when there is a keen awareness that refining capacity and other supply constraints are intensifying. if that risk manifests in the future, it may influence the global economy and the economy of japan by further decreasing the real purchasing power of the non - oil - producing countries and by the full - scale emergence of global inflationary concerns. as for overseas economies, price stability is being maintained in the united states as the federal reserve has raised interest rates to prevent the emergence of inflationary pressures while crude oil prices remain at a high level. in europe and asia, concern is shifting toward the risks on the inflationary side. the european central bank raised interest rates at the beginning of december 2005. the maintenance of an accommodative financial environment under price stability forms part of the background to the expansion of overseas economies in recent years, and a future loss of price stability could change this structure and exert a negative influence on the growth of the global economy. while i mentioned before that the japanese economy is unlikely to fall into a recession due to domestic factors, we must note that an unexpected slowdown in overseas economies or other large external shocks could decelerate economic growth in japan. price conditions and the outlook turning to price conditions, domestic corporate goods prices

concepts into real merchandise, there were trans - pacific flows of goods, human resources and financial services in all directions, such as in the development of component technologies, manufacturing processes and distribution channels. in such processes, not only silicon valley companies but also many asian firms in china, korea, taiwan and japan are involved. 2. asia in the global economy asia acting as growth pole to enhance resilience of global economy now, let me briefly illustrate the economic growth of the asia - pacific region and the strengthened linkages among the countries of that region, as the basis for further discussion. the economic growth of asia has continuously exceeded that of the global economy in recent years. indeed, the relative strength of the asian economy has been more pronounced since the global financial crisis. according to the imf world economic outlook, asian growth, which stood at 5. 9 percent in 2011, is expected to continue growing at a relatively high rate of 6 percent in 2012. meanwhile, the growth of advanced economies, which stood at 1. 6 percent in 2011, is expected to remain as low as 1. 4 percent in 2012 ( chart 6 ). according to the imf, asian economies are expected to increase their share of the global economy from 30 % to 40 % or more by the year of 2030 if the current trend of asian growth is maintained ( chart 7 ). the asian share of the global economy is also increasing in terms of trade ( chart 8 ). in this regard, japan ’ s “ white paper on the international economy and trade ” published in 2011 provides an insightful analysis on the global trade structure. this paper divides the world into six areas, that is, nafta, the eu, asean, mercosur, china and japan ( chart 9 ). according to this analysis, the share of the trade between advanced economies such as nafta, eu and japan to the total was as much as around 60 percent in 1990, but this figure declined to a little more than 30 percent in 2008. on the other hand, the share of trans - pacific trade among nafta, asean, mercosur, china and japan excluding that between nafta and japan increased from around 25 percent in 1990 to around 45 percent in 2008 ( chart 10 ). this fact illustrates the dramatic development of trade network among the asian - pacific region. the growth of asia is leading global economy even after the global financial crisis. despite the bursting of the housing bubble in the u. s