developments. since covid - 19 has been pushing down aggregate demand considerably through these three channels, corporate profits seem to have declined significantly recently. weakness in the employment situation has also become evident, as seen in ( 1 ) the fact that the di for employment conditions turned to a net " excessive " for manufacturing, accommodations, and eating and drinking services in the june tankan ; ( 2 ) a decline in the active job openings - toapplicants ratio ; and ( 3 ) a rise in the unemployment rate ( chart 4 ). next, i will elaborate on price developments in japan. the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food ( the core cpi ) has decelerated recently, mainly due to the effects of the decline in energy prices, and has been at around 0 percent. on the other hand, the rate of change in the cpi for all items less fresh food and energy has been in the range of 0. 0 - 0. 5 percent recently, albeit with fluctuations ( chart 5 ). on the price front, covid - 19 has affected not only energy but also such items as the following : ( 1 ) travel - related services such as charges for hotels and for overseas package tours ; ( 2 ) water charges, which declined due to reductions and exemptions by local governments for those who have difficulty paying them ; and ( 3 ) tutorial fees, which declined reflecting the introduction of online classes. meanwhile, moves to reduce prices to stimulate demand seen during the deflationary period in the past are not widely observed at this point. in financial markets, tension has abated compared with the period from late february through march 2020, when the markets were extremely unstable. in the foreign exchange market, the yen can be considered to have been substantially stable against the u. s. dollar : it temporarily showed large fluctuations but has become increasingly range bound despite the reduction of the federal reserve's policy rate by as much as 2. 25 percentage points in total since july 2019. in addition, the annual range of fluctuation for the dollar / yen exchange rate throughout 2019 was as narrow as around 8 yen, the smallest figure recorded since the adoption of the floating exchange rate system in 1973. i would like to point out the following as background to these developments. first, there was no significant difference in the volume of exports and imports for 2019 in japan, with exports amounting to 76. 9 trillion yen and imports

intermediation and payments, help create value and thus enhance welfare. when we focus on this fact, we can finally understand why we are uncomfortable with some past developments in the financial industry. problems seem to have arisen when a product or service is insufficiently anchored in intermediation or facilitation of payments. innovation is useless or even harmful, if financial institutions lose sight of the needs of their clients, or more broadly the society. technology - driven innovations are more likely to be beneficial, because, when the innovator is deliberating on the application of technology, the client cannot usually be ignored. on the other hand, in the case of modality - driven innovations, one can easily lose sight of the client when cutting and dicing existing businesses. for example, securitization now has a bad name because of its perceived role in the financial crisis. nevertheless, securitization is conceptually beneficial, because it aims to bridge the gap between the risk preferences of lenders and the actual risk profile of borrowers. the only condition is probably that the investment bank arranging the transaction must find takers for all the tranches. in this regard, some resecuritized products, which inflicted enormous pain during the recent financial crisis, are suspect because they include unsold tranches of original securitization vehicles, tranches that investment banks could not sell to willing buyers or found too unattractive for their own books. considering that financial institutions enhance welfare through intermediation, relevance of any developments to intermediation should be a good starting point. this perspective is particularly important for modality - driven innovations. iv. dealing with undesirable outcomes unfortunately, the world of finance is complex. as a result, one or two simple tests cannot separate all the wheat from the chaff. in this regard, one of the most difficult issues involves the claim that certain instruments or practices provide a public good, namely the better functioning of markets through enhanced liquidity or more efficient price discovery. for example, in the case of high - frequency trading ( hft ), one can argue that the increase in the speed and execution serves no socially useful purpose, because most of the hft transactions are netted out and, therefore, very little intermediation actually takes place. 2 on the other hand, one could argue equally persuasively that trial and error carried out by hft facilitate price discovery, performing a useful function for market