of 2023 ( chart 16 ). in the 2023 annual spring labor - management wage negotiations, firms raised base pay by 2. 12 percent ; when combined with an increase in regular salaries, this represents a 3. 58 percent increase. before the outbreak of the pandemic, patient monetary easing in japan helped to expand labor demand and improve labor market conditions, so that the unemployment rate and the active job openings - to - applicants ratio improved to nearly the most advantageous levels observed during the bubble economy. despite this, nominal wage increases were slow to materialize. one possible reason for this is that, while firms found it difficult to pass on wage hikes to prices, they tended in particular to refrain from increasing the wages of regular employees, who are less likely to leave their jobs. the rapid increase in the momentum for wage hikes since the start of 2023 can be attributed to the so - called big push caused by the shock of a surge in import prices just at a time when labor market conditions were already sufficiently tight. the third condition for changing the zero price and wage norm is not only households'medium to long - term inflation expectations rising to 2 percent but also expectations being entrenched among households that wage increases will continue to exceed that level. household inflation expectations have been steadily rising due to price increases since 2022 ( chart 17 ). however, if prices continue to rise while wages do not, households will have no choice but to reign in their real consumption. in fact, recent developments in private consumption suggest that the tendency to curb real consumption because of rising prices has become somewhat stronger ( chart 18 ). this tendency of households to curb consumption will probably continue until real wages rise in such a way that wage growth can keep up with inflation and households gain confidence that this wage growth will continue. in resolving this issue, what is critical first and foremost is for the real wage growth rate, which is currently negative, to turn positive, as factors pushing up import prices subside and firms make further progress in raising wages. the bank's mission for the time being is to help bring about this situation as swiftly as possible by continuing with patient monetary easing. thank you. economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in niigata october 12, 2023 noguchi asahi member of the policy board bank of japan chart 1 high inflation in the united states and europe united states germany united kingdom y / y % chg. y /

are mostly unchanged mainly due to the decrease in prices of electric machinery. meanwhile, consumer prices continue to be somewhat weak owing to the slight decrease in the prices of private - sector services and the decline in prices of imported products reflecting the past appreciation of the yen. corporate service prices are still falling slowly. this report was written based on data and information available when the bank of japan monetary policy meeting was held on 11 august 2000. the bank ’ s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on 11 august 2000 as the basis of monetary policy decisions. as for the outlook on prices, downward pressure on prices stemming from weak demand is declining significantly while an economic recovery is expected to continue moderately. upward pressure on prices is likely to arise temporarily from the increase in crude oil prices. on the other hand, in addition to the declining trend of machinery prices due to technological innovations, the decline in prices of consumer goods arising from the past appreciation of the yen and the streamlining of distribution channels will exert downward pressure on prices. thus, prices overall are expected to be stable or weak somewhat. in the financial market, the overnight call rate has generally stayed near zero, and financial institutions have been confident about the availability of overnight funds. the amount of funds outstanding in the call money market has decreased slightly. interest rates on term instruments once declined from mid - july, but have recently increased again reflecting the change in expectations that the zero interest rate policy would be terminated. the japan premium remains negligible. yields on long - term government bonds recently increased somewhat, and has been around 1. 75 percent. the yield spread between private bonds ( bank debentures and corporate bonds ) and government bonds remains mostly unchanged as a whole. stock prices fell from mid - july mainly due to the filing of reconstruction proceedings by a major retailer and the decline in u. s. stock prices. in the foreign exchange market, the yen fell moderately towards the end of july and the yen - dollar exchange rate temporarily rose to around 110 yen. the yen is currently being traded in the range of 107 - 109 yen to the u. s. dollar. with regard to corporate finance, private banks have basically retained their cautious lending attitude. however, constraint that had been caused by severe fund - raising conditions and insufficient capital base has eased considerably. given this, major banks continue to be more active in extending loans, while carefully evaluating the credit risks involved. on the other hand, the