Based on an international agreement, full implementation of the finalized Basel III standards has been deferred by one year, and banks have been encouraged to use their capital and liquidity buffers. Moreover, the Bank announced with the Financial Services Agency in April an easing of the leverage ratio requirement. These responses have been effective. Although financial markets are still nervous, tension has eased.
I am pleased to have this opportunity to present an overall review of the Bank's conduct of monetary policy. I. Developments in Japan's economy  Japan's exports have decreased due to the slowdown in overseas economies. With the deterioration in corporate profits and households' employment and income situation, domestic private demand, particularly business fixed investment and private consumption, has weakened.