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

, o., and d. leigh ( 2013 ), “ growth forecast errors and fiscal multipliers ”, american economic review, vol. 103, no. 1, pp. 117 - 120. [ 12 ] see beyer, a., cœure, b., and mendicino, c. ( 2017 ), “ the crisis, ten year after : lessons learnt from monetary and financial research ”, economics and statistics, no. 494 - 495 - 496, pp. 45 - 64. [ 13 ] see rochet, j. - c. and tirole, j. ( 2002 ), “ cooperation among competitors : some economics of payment card associations ”, rand journal of economics, vol. 33, pp. 549 - 70. [ 14 ] see cœure, b. ( 2012 ), “ central banking, insurance and incentives ”, speech at the ecb conference on debt, growth and macroeconomic policy, frankfurt, 6 december. [ 15 ] see above. [ 16 ] eisenhower, d. ( 1957 ), remarks at the national defense executive reserve conference, 14 november. [ 17 ] see, for example, cœure, b. ( 2017 ), ” policy analysis with big data ”, speech at the conference on economic and financial regulation in the era of big data organised by the banque de france, paris, 24 november. [ 18 ] see carney, m. ( 2015 ), “ breaking the tragedy of the horizon — climate change and financial stability ”, speech given at lloyd's of london. [ 19 ] see cœure, b. ( 2018 ), “ monetary policy and climate change ”, speech at a conference on “ scaling up green finance : the role of central banks ”, organised by the network for greening the financial system, the deutsche bundesbank and the council on economic policies, berlin, 8 november. european central bank directorate general communications sonnemannstrasse 20, 60314 frankfurt am main, germany tel. : + 49 69 1344 7455, e - mail : media @ ecb. europa. eu website : www. ecb. europa. eu reproduction is permitted provided that the source is acknowledged. media contacts copyright 2019, european central bank