has been greatly improved. by accurately showing the performance of a firm, these changes put strong pressure on corporate managers to pursue restructuring and higher profits. second, corporate managers have become increasingly aware of return on capital. third, the mentality of employees has changed. japan ’ s labor market, which is characterized by lifetime employment and the seniority - based wage system, used to be perceived by many as lacking flexibility. however, recently we have seen gradual changes in the market as large - scale employment adjustment has begun to be observed. fourth, reform of the financial system has been proceeding. since the autumn of 1998, a legal framework for the smooth dissolution of failed financial institutions has been established and public funds have been injected into major banks to strengthen their capital base. although there remain a lot of things to be solved, the condition of japanese financial institutions has significantly improved thanks to the restructuring efforts on the part of financial institutions. related to these positive developments, direct investment into japan has substantially increased in recent years. in the past, inward direct investment was much smaller than outward direct investment. in fact, it was only 200 million dollars in 1996. however, it has been on a rising trend, amounting to 12. 8 billion dollars last year. i have great expectations for a continuing increase in direct investment from abroad as it would stimulate japan ’ s economy through the transfer of managerial resources and business expertise. before closing, if i may summarize, firstly, a stable macroeconomic environment is a prerequisite for sustainable growth, and in this regard, monetary policy plays a very important role. second, to raise the economic growth rate over the medium to long run, structural reform affecting the supply side of the economy is indispensable. i think that the contrast between the us and japanese economies during the past ten to fifteen years exactly proves this point. let me conclude my remarks by quoting the following prayer for “ serenity “ by dr reinhold niebuhr which i cherish whenever i face challenging issues as governor of the bank of japan : god grant me the serenity to accept the things i cannot change, the courage to change the things i can ; and the wisdom to know the difference. thank you very much for your kind attention.

. figures for " actual base pay increase " and " actual regular wage increase " from 1991 to 2014 are those published by the central labour relations commission, while those from 2015 to 2024 are figures released by the japanese trade union confederation ( rengo ). figures are based on the wage negotiation results of labor unions for which the base pay increase is clear. sources : central labour relations commission ; ministry of internal affairs and communications ; rengo. next, i will turn to business fixed investment. on the back of favorable corporate profits on the whole, business fixed investment has been on a moderate increasing trend ; as for the business fixed investment plans in the june 2024 tankan ( short - term economic survey of enterprises in japan ), the reported rate for fiscal 2024 indicates a relatively high increase compared with past june tankan surveys ( chart 4 ). under such circumstances, the remaining orders for machinery and construction have stayed on an increasing trend, as there have been some cases where firms postponed fixed investment in response to labor shortages. regarding the outlook, although the amount of business fixed investment could be pushed down due to these postponements, such investment is likely to follow a long - term uptrend. this is due to firm demand for fixed investment, such as investment to address labor shortages and digitalrelated investment, as well as investments associated with the green transformation and with strengthening supply chains. chart 4 : business fixed investment planned and actual investment remaining orders y / y % chg. 40 tril. yen tankan ( planned investment in current fiscal year as of the june survey of each year ) private nonresidential investment ( sna, nominal ) tankan ( actual ) tril. yen 30 machinery ( excluding orders for ships, left scale ) construction ( right scale ) - 10 - 20 fy08 cy19 notes : 1. in the left panel, tankan figures include software and r & d investments and exclude land purchasing expenses. figures are for all industries including financial institutions. 2. in the left panel, the figure for " private nonresidential investment " for fiscal 2024 is for 2024 / q2. 3. in the right panel, figures for " construction " are based on a survey of 50 major construction companies. sources : cabinet office ; ministry of land, infrastructure, transport and tourism ; bank of japan. b. price developments turning to japan's price developments, the year - on - year rate of increase in the consumer price index