hire regular employees. the debt - to - sales ratio peaked in 1993, declining thereafter and currently down to a level last seen in the mid - 1980s. japanese firms have continued efforts to repay their debt, and as a result, about one - third of listed firms currently run their business with almost no debt. as for land prices, these have bottomed out and begun to rise, especially at the top end of the market. looking at price movements for individual locations, the prices of locations near the top end of the market, which are considered to have high utility value, are seen to have either stopped declining or to have started to increase. according to the latest urban land price index, which surveyed land prices as of end - march 2005, although prices for all districts continue to decline, the pace of decline in the six major metropolitan areas has clearly slowed down. within these six areas, prices of land in commercial districts have started to increase for the first time in 14 and a half years. firms'efforts to improve their capability of generating high - value - added products and services have combined with the above developments to contribute to drastic profitability gains at japanese firms. for example, the ratio of current profits to sales has almost reached its bubble period level. presuming that progress in dealing with their problems is ultimately reflected in firms'profitability, the current situation may be considered evidence of light at the end of a long tunnel for japanese firms. iv. remaining issues and proposed solution strategies in spite of this progress in addressing their problems, positive forward - looking business activity has not been widespread among firms. various factors lie behind this, but the main one is the substantial fall in people's expectations of economic growth which has been generated by the prolonged period of sluggish economic growth. in fact, the annual survey of corporate behavior released by the cabinet office showed that firms'expectations with regard to japan's economic growth tend to be based on movements in actual growth over the preceding few years. applying this to future economic developments, the effects of the prolonged period of sluggish economic growth may be expected gradually to fade and firms'expectations of growth to increase once the economy returns to a sustainable growth path. however, even when memories of past experience gradually fade away, firms'expectations of growth will not increase if they do not respond proactively to recent changes in the economic environment. among these changes, those considered most crucial by corporate management are the issues of the ageing population and the

haruhiko kuroda : “ comprehensive assessment ” of the monetary easing – concept and approaches speech by mr haruhiko kuroda, governor of the bank of japan, at the kisaragi - kai meeting, tokyo, 5 september 2016. * * * accompanying charts can be found at the end of the speech or on the bank of japan ’ s website. introduction it is my great pleasure to have the opportunity today to speak at the kisaragi - kai meeting. at the monetary policy meeting ( mpm ) held at end - july, the bank of japan decided to enhance monetary easing by increasing its purchases of exchange - traded funds ( etfs ) and by ensuring smooth funding in foreign currencies by japanese firms. at the same time, against the backdrop of heightened uncertainty over the outlook for prices, with a view to achieving the price stability target of 2 percent at the earliest possible time, it also decided to conduct at the next mpm to be held in late september a comprehensive assessment of the developments in economic activity and prices, as well as of the policy effects, over the past three years since the introduction of quantitative and qualitative monetary easing ( qqe ). today, i would like to talk about the concept of and approaches to this comprehensive assessment. i. background the bank introduced qqe in april 2013. during the more than three years since then, japan ’ s economic activity and prices have improved substantially, and japan ’ s economy is no longer in deflation. however, the price stability target of 2 percent has not been achieved yet, despite the unprecedented large - scale monetary easing. how monetary policy has functioned during these years and what factors have possibly hampered achievement of the 2 percent target is the first issue to be analyzed. the second issue is regarding “ qqe with a negative interest rate, ” which was introduced more than half a year ago. under the negative interest rate policy, various interest rates, including japanese government bond ( jgb ) yields as well as rates for lending and corporate bonds, have declined substantially ; thus, the policy already has exerted remarkable effects. at the same time, however, it has had an impact on financial markets ’ liquidity and financial institutions ’ profits. the effects and impact of this policy also need to be assessed. the bank will examine these issues in an objective manner, by carefully analyzing observed facts and checking them against the theories underpinning the bank ’ s policy. with the results of the