be generally favorable particularly for firms with high credit ratings, although the issuing environment for those with low credit ratings is deteriorating. credit demand in the private sector is declining faster mainly because firms are decreasing their business fixed investment while continuously reducing their debts. amid these developments, private banks ’ lending continues to decline at about 2 percent on a yearon - year basis. as for the amount outstanding of corporate bonds issued, the year - on - year growth rate has been slowing due to a decrease in the issuance of corporate bonds with low credit ratings. the year - on - year growth rate of the amount outstanding of cp issued is declining recently, although the amount is still well above the previous year ’ s level. the growth rate of money stock ( m2 + cds ) in november increased slightly from the previous month owing to a rise in demand deposits. funding costs for firms continue to be at extremely low levels on the whole, although market funding costs for some firms are rising. overall, the recent financial environment remains extremely easy in terms of money market conditions and interest rate levels. however, the fund - raising conditions of firms with high credit risks, especially of small firms, are becoming severe as private banks and investors are becoming more cautious in taking credit risks against the background of a growing number of corporate bankruptcies. hence, the developments in the behavior of financial institutions and corporate financing need closer monitoring.

in the range of 0. 8 - 0. 9 percent, as the demand of banks and other institutional investors for the bonds has become even stronger. yield spreads between private bonds ( bank bonds and corporate bonds ) and government bonds remain virtually unchanged. stock prices continue to be weak, reflecting the uncertainty about the domestic economic outlook. the nikkei 225 stock average is recently moving at around 8, 500 yen. in the foreign exchange market, the yen has been strengthening somewhat, reflecting the weakening of the u. s. dollar on the whole mainly caused by the strained situation in the middle east. the yen is currently traded in the range of 117 - 119 yen to the u. s. dollar. 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, particularly small ones, continue to be severe. in the corporate bond and cp markets, the issuing environment for firms with high credit ratings is accommodative, but the environment for firms with low credit ratings is severe. credit demand in the private sector continues to follow a downtrend mainly because business fixed investment remains sluggish while firms are continuously reducing their debts. amid these developments, private banks ’ lending continues to decline by about 2 - 3 percent on a yearon - year basis. the amount outstanding of corporate bonds and cp issued is moving at around the previous year ’ s level. meanwhile, according to business surveys, the financial position of firms, particularly that of small firms, remains severe. the monetary base exhibits a high year - on - year growth rate of around 20 percent. the year - on - year growth rate of the money stock dropped to around 2. 0 - 2. 5 percent in december. funding costs for firms continue to be at extremely low levels on the whole. against the above background, the financial developments are summarized as follows. money market conditions as a whole continue to be extremely easy. long - term interest rates are declining. the money stock and the monetary base maintain high growth rates relative to that of economic activity as a whole. however, stock prices remain unstable. in corporate finance, the fund - raising environment of firms with low credit risks is accommodative on the whole, but with regard to firms with high credit risks, the stance of investors is severe and the lending attitudes of private banks are becoming more