to this question. first, the bank requires market participants to bid actively against its offers, which is one of the bank ’ s requirements for participation in market operations. second, selling a large amount of long - term jgbs through the bank ’ s outright purchase has a smaller effect on market prices than selling them in the market. and third, unlike short - term interest rates, interest rates on long - term jgbs have not yet reached zero. all these explanations appear plausible, but cannot be conclusive. the first explanation also applies to the bank ’ s market operations for providing short - term funds, and these operations have actually experienced undersubscription. the second one may hold true to some extent. the third explanation that interest rates on long - term jgbs have not yet reached zero seems the most convincing. whatever the explanations, from the viewpoint of providing ample funds and analyzing the effect on market prices of jgbs, we should pay more attention to the motivation of market participants for bidding on the bank ’ s offers. the second observation is that the provision of funds dependent largely on the outright purchase of long - term jgbs has created concern in the bank ’ s market operations. the bank is currently conducting the outright purchase of long - term jgbs at a high rate of 1. 2 trillion yen per month. its balance sheets at the end of march 2003 revealed that the total of banknotes and current account deposits increased by about 6. 5 trillion yen from a year earlier on the liability side. on the asset side, the outright purchase of long - term jgbs increased substantially, while money market operations decreased. in fact, the amount outstanding of long - term jgbs held by the bank at the end of march 2003 increased by roughly 9 trillion yen from a year earlier, while the amount of funds provided by money market operations decreased by about 7 trillion yen. the difference of about 3 trillion yen between the increase in the total of banknotes and current account deposits and the amount of funds provided by the bank is explained by the decrease in government excess funds, which were paid to the private sector. if the decrease in the volume of transactions in the money market were to cause difficulties to financial institutions in smoothly raising short - term funds, the bank ’ s money market operations may provide an alternative means of securing smooth funding. in this context, a decrease in the bank ’ s money market operations could be a destabilizing factor for financial markets

as a result of swift and aggressive responses taken by the government and central bank in each country and region, tension in financial markets has abated somewhat. however, the markets have remained nervous due to a decline in liquidity. in addition, although japan's financial system has maintained stability on the whole, financial conditions have become less accommodative in terms of corporate financing, as seen in deterioration in firms'financial positions. ii. conduct of monetary policy next, i will explain the bank's conduct of monetary policy. the bank considers that the important thing in terms of monetary policy under the recent economic and financial situation is to support financing mainly of firms and maintain stability in financial markets. with this in mind, in march and april, it enhanced monetary easing. moreover, at the unscheduled monetary policy meeting held on may 22, the bank decided to introduce a new fund - provisioning measure to further support financing mainly of small and medium - sized firms. the bank has introduced and enhanced the following three measures since march : purchases of cp and corporate bonds, ( 2 ) the special funds - supplying operations to facilitate financing in response to the novel coronavirus ( covid - 19 ), and ( 3 ) the new fund - provisioning measure. through these three measures, which are referred to as the special program to support financing in response to the novel coronavirus ( covid - 19 ) with the total size of about 75 trillion yen, it will actively support financing mainly of firms while cooperating with the government. in addition, with a view to maintaining stability in financial markets, the bank has been providing ample yen and foreign currency funds without setting upper limits mainly through purchases of japanese government bonds ( jgbs ) and the conduct of the u. s. dollar funds - supplying operations, and has been actively purchasing assets such as exchange - traded funds ( etfs ). by conducting these measures, it will continue to contribute to supporting financing mainly of firms and maintaining stability in financial markets. the bank recognizes that powerful monetary easing measures will contribute to supporting economic and financial activities, coupled with various measures by the japanese government as well as those by the government and central bank of each country in response to the spread of covid - 19. on this basis, the bank will closely monitor the impact of covid - 19 for the time being and will not hesitate to take additional easing measures if necessary. thank you.