, in the short - term money markets, the overnight call rate continues to hover at very close to zero percent. moreover, longer - term interest rates such as tb and fb rates continue to be at low levels as a whole, although the markets remain nervous reflecting weak bank stock prices. yields on long - term government bonds continue to move at around 1. 0 percent. yield spreads between private bonds ( bank bonds and corporate bonds ) and government bonds remain virtually unchanged. stock prices turned up in late - november, but weakened again in december in line with a decline in u. s. and european stock prices. the nikkei 225 stock average is recently moving at around 8, 500 yen. in the foreign exchange market, the yen declined until the beginning of december reflecting the improvement in some u. s. economic indicators. thereafter, the yen rebounded as the u. s. dollar weakened again on the whole due mainly to geopolitical factors. the yen is currently traded in the range of 120 - 122 yen to the u. s. dollar. with regard to corporate finance, private banks are becoming more 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 have become slightly more severe. in the corporate bond and cp markets, the issuing environment for firms with high credit ratings is accommodative, but the environment for firms with low credit ratings is severe. credit demand in the private sector continues to follow a downtrend mainly because firms ’ business fixed investment remains sluggish 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 growth rate of the amount outstanding of corporate bonds and cp issued is on a declining trend. meanwhile, according to business surveys, the financial position of firms, particularly that of small firms, remains severe. the monetary base exhibits a high year - on - year growth rate of around 20 percent. the year - on - year growth rate of the money stock remains around 3. 0 - 3. 5 percent. funding costs for firms continue to be at extremely low levels on the whole. against the above background, the financial developments are summarized as follows. money market conditions as a whole continues to be extremely easy. long - term interest rates are low. the money stock and the monetary base maintain high growth rates relative to

in some peripheral european countries. although trust in the government ’ s conduct of fiscal policy has been maintained so far, it could crumble without warning and when least expected. therefore, the burning issue to be tackled is the creation and implementation of a roadmap for fiscal consolidation in an effort to maintain trust both at home and abroad. bis central bankers ’ speeches c. measures taken by the bank the bank continues to consistently make contributions as the central bank in order to overcome deflation and return the japanese economy to a sustainable growth path with price stability. the bank ’ s efforts through the conduct of monetary policy also aim to facilitate economic revitalization. the bank must always be ready to proactively implement the necessary policies to achieve its objectives. going forward, the bank should continue to be proactive and do its utmost to bring the japanese economy back to a sustainable growth path with price stability. bis central bankers ’ speeches