developments in overseas economic activity and prices ; developments in the situation surrounding ukraine and in commodity prices ; and the course of covid - 19 at home and abroad and its impact. in this situation, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on japan's economic activity and prices. meanwhile, japan's 1 / 2 bis - central bankers'speeches financial system has maintained stability on the whole. although attention is warranted on, for example, the impact of the tightening of global financial conditions, the financial system is likely to remain highly robust on the whole, mainly because financial institutions have sufficient capital bases. regarding financial risks from a longer - term perspective, while there is a possibility that prolonged downward pressure on financial institutions'profits may lead to a gradual pullback in financial intermediation, 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. japan's economy is on its way to recovery from a downturn caused by covid - 19 and uncertainties for the economy have been extremely high. on the price front, the year - on - year rate of increase in the cpi is projected to decelerate to a level below 2 percent from fiscal 2023. given such developments in economic activity and prices, the bank will continue with monetary easing, aiming to firmly support japan's economy and thereby achieve the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases. thank you. 2 / 2 bis - central bankers'speeches

economic outlook for overseas economies continues to require attention, given that there are some uncertain factors including geopolitical developments and their economic implications. on the domestic side, stock prices are weak. hence, careful monitoring is required of progress in the resolution of the nonperforming - loan problem and its effects on stock prices, corporate finance, and the economy. on the price front, import prices are on a rising trend with some fluctuations, reflecting developments in overseas commodity prices such as crude oil. domestic corporate goods prices have been declining gradually due to the rise in import prices and the improved supply - demand balance in materials industries, despite the continued fall in machinery prices. consumer prices and corporate services prices have also been declining gradually. looking at the conditions influencing price developments, import prices are projected to be firm for the time being due mainly to developments in crude oil prices. although the low levels of inventories will this report is based on data and information available at the time of the bank of japan monetary policy meeting held on february 13 and 14, 2003. the bank ’ s view of recent economic and financial developments, determined by the policy board at the monetary policy meeting held on february 13 and 14, 2003, as the basis for monetary policy decisions. support prices to some degree, the overall condition of supply and demand is expected to continue exerting downward pressure on prices while domestic demand continues to be weak for a while. moreover, factors such as the ongoing technological innovations in machinery and the streamlining of distribution channels will continue to exert downward pressure on prices. under these circumstances, domestic corporate goods prices are likely to continue a gradual decline for the time being. the pace of year - on - year decline in consumer prices is expected to become somewhat slower. this is because the year - on - year change in prices of petroleum products is expected to become positive, and medical costs are projected to rise from april due to public insurance reforms. as for the financial environment, the outstanding balance of current accounts at the bank of japan is recently moving at around 20 trillion yen, as the bank provides ample liquidity. under these circumstances, in the short - term money markets, the overnight call rate continues to hover at very close to zero percent. moreover, longer - term interest rates continue to be at low levels as a whole. yields on long - term government bonds declined further in late january and are recently moving in the range of 0. 8 - 0. 9 percent. yield spreads between private bonds ( bank