the corporate sector, exports and production have been sluggish recently, due mainly to the effects of the slowdown in emerging economies. exports, mainly automobile - related exports, to advanced economies have remained on a steady increasing trend, whereas those to emerging economies have been sluggish, especially of capital goods. exports as a whole have therefore been flat. against this background, production also has been almost flat. in terms of corporate profits, profits of manufacturing firms have been negatively affected by the slowdown in emerging economies and the yen's appreciation ( chart 3 ). nevertheless, those of all industries, including nonmanufacturing firms, have been at a level close to record highs, reflecting an improvement in the terms of trade resulting from the low crude oil prices. the diffusion index ( di ) for business conditions in the september 2016 tankan ( short - term economic survey of enterprises in japan ) has generally stayed at a favorable level. against this backdrop, firms, including large manufacturers, have maintained their positive fixed investment stance. with regard to the outlook, although overseas economies are projected to remain slightly subdued for some time, they are expected to gradually increase their growth rates as advanced economies continue growing steadily and the effects of such steady growth spread to emerging economies. against this background, exports and production are expected to start increasing moderately. business fixed investment may be affected temporarily partly by the slowdown in overseas economies and the past yen appreciation. however, it is likely to continue increasing moderately as the highly accommodative financial conditions continue and growth expectations rise moderately. developments in the household sector next, i would like to turn to developments in the household sector. positive developments in the corporate sector have steadily exerted positive effects on the employment and income situation ( chart 4 ). the tightening trend of labor market conditions has become more evident and the latest active job openings - to - applicants ratio was 1. 38 times, marking the highest level seen since 1991. the unemployment rate has been about 3 percent, which is virtually " full employment. " a perception of labor shortage suggested by the employment conditions di in the september tankan has heightened further. against this background, wages have increased moderately. despite such improvements in the employment and income situation, private consumption has lacked momentum somewhat. looking back, private consumption was relatively weak in the first half of 2016, due mainly to the negative wealth effects brought about by the decline in stock prices. however, various sales statistics show that it has started to pick up recently

##eap determined that abf1 had achieved its original purpose, its proceeds were reinvested in abf2. in july 2018, some selected bonds held within abf2 were made available for lending to support the development of local currency securities lending markets and to enhance the functioning of regional money markets. from a market perspective. activities by those market participants and relevant authorities have been indispensable for the development of asia's capital markets. i would like to recognize and praise all of those who have committed to these efforts. looking to the future, asia needs to further accelerate and deepen the development of its financial markets more than ever before. this is because the existence of more developed capital markets both domestically and regionally will play a much more crucial role for the long - term stable economic growth of the region. today, i would like to discuss the economic implications of the conference theme, " developing asia's capital markets, " from several perspectives. then, i will briefly touch on interest rate benchmark reform, as a specific example of the challenges we are facing as we endeavor to further develop market infrastructures. economic significance of further developments in asia's capital markets financing economic growth through the growing middle - income class let me begin with the importance of relying on the growing middle - income class to finance economic growth. the middle - income class in asia has been growing to a remarkable extent. the organisation for economic co - operation and development ( oecd ) forecasts4 that the middle - income population in asia will constitute 66 percent of the world's share in 2030, more than doubling that in 2009 ( chart 2 ). the rise of asia's middle - income class will be accompanied by growth and diversification of the financial needs of that class. both domestic and regional markets in asia must satisfy those evolving demands by providing various financial services, including investment trusts, pension funds, and insurance. by doing so, asia will receive benefits such as inflows of money from the middle - income class into infrastructure projects, which require a significant amount of funding. in other kharas, h. ( 2010 ), " the emerging middle class in developing countries, " oecd development centre working paper, no. 285. words, meeting the financial demands of the growing middle - income class will contribute to utilization of asian savings for asian investments. strengthening financial stability with more liquid domestic capital markets now, i would like to proceed to a perspective of financial stability.