provides long - term funds at a low interest rate to financial institutions that have increased their lending, at their request, up to an amount equivalent to the net increase in their lending, with a view to encouraging them to take more aggressive action and helping stimulate the proactive credit demand of firms and households. in addition, there is no upper limit to the total amount of funds provided by the bank under this facility. the outstanding balance of the total loans provided through both facilities of the loan support program has exceeded 7 trillion yen, supporting financial institutions ’ efforts to tap firms ’ proactive demand for funds. d. developments in financial markets reflecting such aggressive monetary easing measures, financial conditions in japan have been substantially accommodative. as for firms ’ funding costs, financial institutions ’ lending rates have been significantly low. cp issuance rates have declined to around 0. 1 percent – equivalent to the interest rate applied to excess reserve balances at the bank – and yield spreads between corporate bonds and jgbs have remained narrow on the whole. with regard to credit supply, firms have continued to see financial institutions ’ lending attitudes as being on an improving trend. from end - 2012 until the beginning of april 2013, long - term interest rates in japan declined significantly, reflecting heightened expectations for large - scale monetary easing by the bank and some anticipation of abolishment of the payment of interest on excess reserve balances. however, since the introduction of qqe at the beginning of april, the entire yield curve has risen, reflecting ( 1 ) the correction of the level of interest rates on instruments with mediumterm maturities due to a drop in anticipation of abolishment of interest payments as well as ( 2 ) the phenomenon of “ buying on rumors and selling on facts. ” moreover, since the middle of may, a rise in u. s. long - term interest rates stemming from speculation about possible changes in quantitative easing in the united states has been exerting strong upward pressure on japan ’ s long - term interest rates. at present, yields on 10 - year jgbs have been in the range of 0. 7 – 0. 8 percent, which in absolute terms are higher than those before qqe was introduced at the beginning of april. it should be noted, however, that while the rise in u. s. long - term interest rates has actually caused interest rates in germany and the united kingdom to follow suit, interest rates in japan have recently been more or less

on prices and economic activities under the condition of severe financial market dysfunctions. thus, when market conditions improve, many of them will eventually be terminated. however, timing and sequencing are crucial : financial markets may still be severely segmented even though inter - market arbitrage starts again. market participants ’ confidence may be still fragile. in such circumstances, it is absolute necessity to avoid fallacies and misinterpretations with respect to assessing unconventional policies. i will present five don ’ ts in order to avoid the fallacies which might otherwise mislead us. don ’ t take the central bank ’ s balance sheets as a measure of monetary easing first, do not assume the size of the central bank ’ s balance sheets is indicative of the degree of monetary easing. many unconventional policy measures are designed to be selective and are tailored to a specific market dysfunction. thus, there is no common yardstick evaluating all market intervention. moreover, the usage of unconventional policy facilities declines as market functions improve. shrinkage of a central bank ’ s balance sheet reflecting this mechanism should not be interpreted as a monetary tightening but rather as a sign of improving market conditions. don ’ t look only at the segments of financial markets subject to intervention second, do not look at the conditions of only those segments of financial markets where intervention has taken place. in fact, there might be spill - over effects to other segments. given resource and capital constraints, the central banks target their market interventions quite specifically. however, in so doing, central banks expect positive spill - over effects to other segments not so targeted. a good illustration of this lies in japanese cp markets. we see improvements, as expected and hoped for, in the a2 - rated cp market even though they are not eligible for the boj ’ s purchase program. the a2 - rated cp market is apparently affected by our purchase of a1 - rated cp. don ’ t underestimate safety nets third, do not underestimate the beneficial effects of safety - net measures especially when investors ’ confidence is fragile. when market confidence is eroded, investors are “ excessively ” averse to uncertainty and tend to “ wait and see ” until they feel more confident about making market transactions. a “ safety net ” facility has some of the characteristics of insurance or put options and thus substantially reduces this sort of uncertainty. just as insurance is an umbrella for unexpected rain, a safety net builds confidence whether or not dire events come to pass. an underutilized facility does not necessarily