economy in japan, efficient allocation of economic resources through market mechanisms is indispensable. in this regard, it is of the utmost importance to reform the framework for corporate financing so that participants can accurately evaluate the risk and return associated with transactions and products. this, i would like to emphasize, is the core message of my speech today. the traditional framework for corporate financing in japan worked well in the economic environment and structures of the past, which explains why it will take a substantial amount of effort and energy to change its direction. all the parties concerned, including companies, financial services providers, and the relevant authorities, should tackle the issues boldly by sharing new ideas and promoting innovations. let me conclude by stating that the bank commits itself to playing a leading role in such efforts and cooperation. thank you for your kind attention.

its impact on domestic and overseas economies continue to warrant attention. in addition, there are extremely high uncertainties over how the situation surrounding ukraine will affect japan ’ s economic activity and prices, mainly through developments in global financial and capital markets, commodity prices, and overseas economies. japan ’ s financial system has maintained stability on the whole, despite the pandemic. regarding financial risks from a longer - term perspective, there is a possibility that prolonged downward pressure on financial institutions ’ profits may lead to a gradual pullback in financial intermediation. meanwhile, the vulnerability of the financial system could increase, mainly due to the search for yield behavior. although these risks are judged as not significant at this point, it is necessary to pay close attention to future developments. ii. conduct of monetary policy next, i will explain the bank ’ s conduct of monetary policy. 1 / 2 bis central bankers'speeches japan ’ s gdp has remained below the pre - pandemic level. although the year - on - year rate of change in the cpi is likely to increase clearly in positive territory in the short run, this is expected to occur mainly due to an increase in energy prices. inflation resulting from higher import costs could push down japan ’ s economy through a decline in households ’ real income and deterioration in corporate profits. given such developments in economic activity and prices, the bank will persistently continue with the current powerful monetary easing centered on yield curve control, aiming to firmly support japan ’ s economic activity, which is on its way to recovery from the pandemic, and thereby achieve the price stability target of 2 percent in a sustainable and stable manner. on this basis, while closely monitoring developments at home and abroad, the bank will continue to ensure stability in financial markets through, for example, providing ample liquidity ; it will also continue to do its utmost to support financing, mainly of small and medium - sized firms, by providing funds through the special funds - supplying operations to facilitate financing in response to the novel coronavirus ( covid - 19 ) at a low interest rate to financial institutions that make loans in response to covid - 19. thank you. 2 / 2 bis central bankers'speeches