yen, respectively. 2. the loan support program and other measures prior to the introduction of qqe, the bank established – on its balance sheet – the loan support program, with the aim of making the effect of monetary easing permeate the entire bis central bankers ’ speeches economy. through this program, it has been providing support for private financial institutions ’ efforts to strengthen the foundations for economic growth and to increase their lending. meanwhile, the bank has also been conducting the funds - supplying operation to support financial institutions in disaster areas affected by the great east japan earthquake. since the establishment in 2010 of the measure that later constituted the loan support program, the bank has been enhancing the program by, for example, increasing the maximum amount outstanding of its fund provisioning and extending the application period of the program. as a result, the amount outstanding of loan disbursement under the program has reached about 29 trillion yen as of mid - july 2015. through these efforts, the bank will further promote financial institutions ’ lending, as well as stimulate firms ’ and households ’ demand for credit and continue to support the efforts of financial institutions in disaster areas toward rebuilding. b. assessment of the underlying trend in prices i will now move on to discussing price developments – a crucial factor in making the bank ’ s policy decisions – with a particular focus on how to assess the underlying trend in prices in an environment where fluctuations in energy prices observed since 2014 have been exerting a substantial influence on overall prices. when assessing the underlying trend in prices, i consider it appropriate to also examine for the time being the cpi ( all items less energy ), given that price fluctuations of energy items since 2014 have been exerting a significant effect on the year - on - year rate of increase in the cpi for all items. there is a view that it is necessary to pay attention to a similar index, the year - on - year rate of increase in the cpi ( all items less food and energy ). however, in japan, food expenditures account for a quarter of total household expenditures, which is quite high among advanced economies. therefore, i personally consider it inappropriate to examine the price index that excludes food, considering the extent to which food expenditures affect households. in assessing the underlying trend in prices, i also consider it necessary to take note of the characteristics of the components of the cpi basket in japan. for example, prices of public services and rent in japan are sticky by nature, and less susceptible to developments in economic

koji ishida : economic activity and prices in japan and monetary policy summary of a speech by mr koji ishida, member of the policy board of the bank of japan, at a meeting with business leaders, aomori, 11 september 2013. * * * i. monetary policy a. introduction of the “ price stability target ” and the joint statement by the government and the bank of japan first, i would like to describe the status of the bank of japan ’ s monetary policy conduct at the beginning of this year. at the monetary policy meeting ( mpm ) held on january 21 and 22, 2013, the bank decided to introduce the price stability target of 2 percent in terms of the year - on - year rate of change in the consumer price index ( cpi ). at the same time, it released a joint statement with the government, which clearly stated that the government and the bank would strengthen their policy coordination and work together to overcome deflation early and achieve sustainable economic growth with price stability. in the statement, the bank announced that, under the price stability target, it would pursue monetary easing and aim to achieve this target at the earliest possible time. concurrently, the government announced that it would not only flexibly manage macroeconomic policy but also formulate measures for strengthening the competitiveness and growth potential of japan ’ s economy, and promote them strongly. the government also announced that it would steadily promote measures aimed at establishing a sustainable fiscal structure with a view to ensuring the credibility of fiscal management. b. quantitative and qualitative monetary easing ( qqe ) now i would like to talk about the bank ’ s current monetary policy measures, which aim at overcoming deflation. at the mpm held on april 3 and 4, 2013, the bank introduced qqe to achieve the price stability target of 2 percent in terms of the year - on - year rate of change in the cpi at the earliest possible time, with a time horizon of about two years. the features of this new monetary policy measure are as follows. first, with a view to pursuing quantitative monetary easing, the bank changed the main operating target for money market operations from the uncollateralized overnight call rate to the monetary base, which is the total amount of money the bank directly supplies to the economy. on this basis, the bank increases the monetary base – defined as the sum of banknotes in circulation, coins in circulation, and current account deposits held by financial institutions at the bank – at