in light of such possibilities and continue to support ongoing and future initiatives in this area. i am sure that fisc will continue to play an important role in the various efforts toward development of a robust payment and settlement system. thank you for your kind attention. references bank for international settlements, committee on payment and settlement systems ( 2008 ), " progress in reducing foreign exchange settlement risk, " may 2008. bank of japan ( 2009a ), " payment and settlement systems report 2007 – 2008, " february 2009. bank of japan ( 2009b ), " financial markets report, " march 2009. bank of japan ( 2009c ), " establishment of the new boj - net, " october 2009. bank of japan, financial markets department ( 2009a ), " developments and issues of money markets in japan : the tokyo money market survey in august 2008 and the impact of the failure of lehman brothers, " january 2009 ( available only in japanese ). bank of japan, financial markets department ( 2009b ), " toward the well - established practice on settlement fails in japan : focusing on significance and role of fails practice and the review of fails practice in the u. s., " october 2009 ( available only in japanese ). bank of japan, payment and settlement systems department ( 2009a ), " lessons for japan ’ s payment and settlement systems learned from the collapse of lehman brothers japan, " march 2009 ( available only in japanese ). bank of japan, payment and settlement systems department ( 2009b ), " boj - net funds transfers after the implementation of phase 1 of the next - generation rtgs project, " no. 09 - e - 04, bank of japan review, july 2009. imakubo, kei, and yutaka soejima ( 2008a ), " transaction network in japanese interbank money market, " vol. 27 ( 2 ), kin ’ yu kenkyu, november 2008 ( available only in japanese ). imakubo, kei, and yutaka soejima ( 2008b ), " the microstructure of the japanese interbank money market : interconnection of the fund transfer in boj - net settlement data, " vol. 27 ( 2 ), kin ’ yu kenkyu, november 2008 ( available only in japanese ). graphs

bank of japan ’ s may report of recent economic and financial developments1 bank of japan, communication, 20 may 1999. the bank ’ s view2 japan ’ s economy, at present, has stopped deteriorating, but clear signs of recovery have not been observed yet. with regard to final demand, business fixed investment has been on a downward trend, and recovery in private consumption continues to be weak on the whole. net exports ( exports minus imports ) are leveling off. meanwhile, housing investment has been recovering. public works seem to be increasing rapidly against the background of the large increase in orders in early spring. reflecting such developments in final demand and continued progress in inventory adjustment, industrial production has stopped decreasing. the deterioration in corporate and consumer sentiment seems to have ceased due to this economic situation as well as the improvements in the financial environment, including the subsidence of the public ’ s anxiety about the stability of japan ’ s financial system and the recovery in stock prices. however, corporate profits remain weak, and employment and household income conditions are deteriorating as the unemployment rate has been marking a historical high. conditions in corporate finance continue to improve, but firms ’ concern about the availability of funds in the future has not completely disappeared yet. as for the outlook, with the progress in inventory adjustment gradually paving the way for a recovery in production, the government ’ s economic measures and the monetary easing by the bank will continue to underpin the economy. improvements in the financial environment are also expected to exert positive effects on the economy gradually. with respect to corporate activities, however, firms have started taking steps toward full - scale restructuring, facing the continued decline in profits. although such corporate restructuring is expected to improve productivity, it may, in the short run, reduce fixed investment and discourage household expenditure through the resulting deterioration in employment and income conditions. under such circumstances, it is still difficult to expect an immediate self - sustained recovery in private demand. overall economic developments require careful monitoring in consideration of the above points. it is also important to promote structural reform, while preparing an environment that facilitates such reform, in order to assure the economy ’ s sustained growth in the medium term. with regard to prices, reflecting the large output gap, domestic wholesale prices are on a downtrend, and corporate service prices are weakening. import prices are rising due to the bottoming out of international commodity prices such as crude oil prices. consumer prices remain weak. in relation to price developments in the future, distinct narrowing in the output