yield spreads between private bonds ( bank bonds and corporate bonds ) and government bonds are contracting slightly. however, spreads between bonds with low credit ratings and government bonds still remain wide. stock prices are level on the whole and are basically moving in the range of 11, 000 - 12, 000 yen. in the foreign exchange market, the yen appreciated reflecting the overall downtrend in u. s. dollars due mainly to weak u. s. stock prices. with regard to corporate finance, private banks are becoming more cautious in extending loans to firms with high credit risks while they continue to be more active in extending loans to blue - chip companies. the lending attitudes of financial institutions as perceived by firms are becoming more severe. in corporate bonds and cp markets, the issuing environment for firms with low credit ratings continues to be severe on the whole, but the environment for firms with high credit ratings is improving recently. credit demand in the private sector continues to follow a downtrend mainly because firms are decreasing their business fixed investment while continuously reducing their debts. amid these developments, private banks ’ lending continues to decline by about 2 - 3 percent on a yearon - year basis. the year - on - year growth rate of the amount outstanding of corporate bonds issued is decreasing somewhat. the year - on - year growth rate of the amount outstanding of cp issued continues to decline, although the amount is still well above the previous year ’ s level. the year - on - year growth rate of the monetary base in april increased further due partly to the continued high liquidity demand even after entering the new fiscal year, reflecting a system failure of a major bank group. the year - on - year growth rate of the money stock ( m2 + cds ) remained around 3. 5 - 4. 0 percent. funding costs for firms continue to be at extremely low levels on the whole. overall, the recent financial environment remains extremely easy on the whole in terms of money market conditions. the deterioration in the financial position of firms is coming to a halt. however, the stance of investors toward firms with high credit risks remains severe and the lending attitudes of private banks are becoming more cautious. hence, the developments in the behavior of financial institutions and corporate financing continue to require close monitoring.

average inflation rate after cy 95 ( discontinued at the introduction of qqe for japan ). 4. gray bands indicate recession periods ( peaks and bottoms of business cycle are those determined by the national bureau of economic research for the united states and cabinet office for japan ). sources : cabinet office ; ministry of internal affairs and communications ; federal reserve bank of st. louis ; national bureau of economic research. chart 10 consumption before and after consumption tax hike real disposable income and real consumption expenditures cy 2015 = 100 average consumption propensity fy 2000 = 100 system of national accounts family income and expenditure survey real consumption expenditure consumption tax hike before most recent consumption tax hike ( jan. 2000 - mar. 2014 ) after most recent consumption tax hike ( apr. 2014 - dec. 2017 ) fy 2000 real disposable income cy 2015 = 100 note : data are for workers ’ households with two or more members. source : ministry of internal affairs and communications, ” family income and expenditure survey. “ 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 notes : 1. average consumption propensity = household consumption expenditure / household disposable income. 2. disposable income for national accounts includes that of private unincorporated enterprises. 3. figures for the family income and expenditure survey are those for the average of each fiscal year ( average of april to december for 2017 ). sources : cabinet office, “ system of national accounts ” ; ministry of internal affairs and communications, ” family income and expenditure survey. “