yield curve control, so that long - term interest rates will be formed smoothly in financial markets in response to future developments ( chart 9 ). in a phase where upward pressure is exerted on interest rates, strictly capping long - term interest rates could affect the functioning of bond markets and the volatility in other financial markets. the modification of the conduct of yield curve control is likely to contribute to mitigating such side effects. even in this modified conduct of yield curve control, the bank will continue with large - scale jgb purchases and, in a phase of rising interest rates, will keep making nimble responses through market operations depending on factors such as the levels and the pace of change in long - term interest rates. therefore, the bank deems that 10 - year jgb yields are unlikely to be significantly above 1 percent even if upward pressure is exerted on them. although long - term interest rates could rise somewhat, real interest rates, which are adjusted by inflation expectations, are important in capturing the effects of monetary policy on economic activity and prices. as i explained earlier, since last year, inflation expectations have risen moderately and, despite an increase in long - term interest rates, real interest rates have continued to be negative. as real interest rates are likely to remain so, sufficiently accommodative financial conditions are expected to be maintained. concluding remarks in closing, i would like to touch on the tokai region's economy from a medium - to long - term perspective. let me first comment on the progress with innovation. the tokai region has been japan's important base for monozukuri ( manufacturing ) and its competitiveness has been supported by constant innovation, which has seen new developments recently. for instance, as the electrification of vehicles progresses, major changes have started to take place in the automobile industry, including its supply chains, with technologies that could transform the industry itself being launched one after another. in addition, numerous firms and local governments have been collaborating on, for example, building supply chains for hydrogen and ammonia as well as carrying out experiments with a view to creating demand for these fuel sources. moreover, firms in cutting - edge industries, including the robotics industry, have been gathering in the tokai region, with active support from local governments. it is encouraging to see such efforts being made to ensure that the region continues to be a wellspring of innovation for japan. furthermore, the tokai region has been attracting attention for a theme park that aims

in the left - hand chart, figures are based on the financial statements statistics of corporations by industry, quarterly and exclude " finance and insurance. " figures from 2009 / q2 onward exclude pure holding companies. 2. in the right - hand chart, figures are based on the tankan, including software and r & d investments and excluding land purchasing expenses. r & d investment is not included before the march 2017 survey. figures are for all industries including financial institutions. sources : ministry of finance ; bank of japan. chart 4 i. economic developments household sector employee income scheduled cash earnings y / y % chg. consumption activity index y / y % chg. - 1 - 2 - 1 - 2 - 3 cy 17 scheduled cash earnings for full - time employees hourly scheduled cash earnings for part - time employees - 3 - 4 - 5 cy 17 s. a., cy 2019 = 100 nominal wages ( total cash earnings ) number of employees employee income real employee income cy 17 total real private consumption of which, services notes : 1. in the left - hand and middle charts, q1 = march - may, q2 = june - august, q3 = september - november, q4 = december - february. figures are based on continuing observations following the sample revisions of the monthly labour survey. 2. in the middle chart, employee income = total cash earnings ( monthly labour survey ) × number of employees ( labour force survey ). figures for real employee income are based on staff calculations using the cpi ( less imputed rent ). 3. in the right - hand chart, figures for total real private consumption are the real consumption activity index ( travel balance adjusted ) based on staff calculations, which exclude inbound tourism consumption and include outbound tourism consumption. sources : ministry of health, labour and welfare ; ministry of internal affairs and communications ; bank of japan. chart 5 ii. price developments the boj's forecasts for the cpi ( oct. 2023 outlook report ) developments over time forecasts y / y % chg. y / y % chg. 5 energy + 3. 8 % food products goods ( less food products ) + 2. 8 % services + 2. 8 % cpi ( less fresh food ) + 1. 9 % cpi ( less fresh food and energy ) + 1. 9 % + 1. 7 % cpi ( less fresh food ) - 1 - 1 cpi ( less fresh food and energy ) - 2 - 2 cy 19 fy 23 note