extending loans, mainly to blue - chip companies, while carefully evaluating the credit risks involved. there seem to be no significant changes in the fund - raising conditions of firms in the markets for such instruments as corporate bonds and cp. on the other hand, credit demand of private firms continues to lack momentum as corporate demand for external funds is subdued, since firms ’ cash flow is at a high level. moreover, firms continue to reduce their debts as part of their balance - sheet restructuring measures. as a result, credit demand in the private sector has continued to be basically stagnant. in view of this, the underlying tone of private banks ’ lending remains sluggish, although the year - onyear rate of decrease moderated somewhat in january and february. meanwhile, the amount outstanding of corporate bonds issued continues to be slightly above the previous year ’ s level. the amount outstanding of cp issued remains at a high level. recently, the growth rate of money stock ( m2 + cds ) is increasing reflecting the inflow from postal savings. as for funding costs for firms, both short - and long - term funding rates are declining reflecting the decrease in market interest rates. in this financial environment, the lending attitude of financial institutions and corporate financing conditions remain easy. however, the effects of the decline in stock prices on the behavior of financial institutions and the fund - raising conditions of firms need to be carefully monitored. “ the bank of japan will encourage the uncollateralized overnight call rate to move on average around 0. 15 percent. ”

the momentum toward achieving the price stability target of 2 percent is maintained but is not yet sufficiently firm, and thus developments in prices continue to warrant careful attention. ii. conduct of monetary policy next, i will explain the bank ’ s conduct of monetary policy. the bank has been conducting powerful monetary easing under the framework of “ quantitative and qualitative monetary easing ( qqe ) with yield curve control ” introduced in september 2016. in terms of yield curve control, with a view to facilitating the formation of the yield curve that is considered most appropriate for achieving the price stability target of 2 percent, the bank has conducted purchases of japanese government bonds ( jgbs ) under the guideline for market 1 / 2 bis central bankers'speeches operations, in which it sets the short - term policy interest rate at minus 0. 1 percent and the target level of 10 - year jgb yields at around zero percent. at the july monetary policy meeting ( mpm ), with a view to persistently continuing with such powerful monetary easing, the bank decided to strengthen the current policy framework. first, the bank introduced forward guidance for policy rates, with which it intended to maintain the current extremely low levels of short - and long - term interest rates for an extended period of time. this aims to clarify the policy stance of continuing with powerful monetary easing by making clear future policy rates in advance. second, the bank decided to conduct market operations and asset purchases in a more flexible manner. as the degree of market functioning consequently improves, such as through interest rate formation becoming more flexible, this likely will lead to enhancing the sustainability of the policy. the bank deems that such policy responses will lead to achieving 2 percent inflation at the earliest possible time while securing stability in economic and financial conditions. it will continue to examine the risks considered most relevant to the conduct of monetary policy and conduct its policy in an appropriate manner, taking account of developments in economic activity and prices as well as financial conditions. thank you. 2 / 2 bis central bankers'speeches