Meanwhile, growth in lending by private financial institutions has continued to be slow, owing both to weak corporate demand for new funds and to an increase in capital market financing. Monetary aggregates in terms of M2 + CDs average outstanding, however, have continued to grow at over 3.0 per cent. 3.
To gauge future developments of Japan’s economy in the context of individual components of final demand, public-sector investment is expected to show further declines in the coming months. Net exports are likely to continue to increase for some time despite the increase in imports caused by structural factors, as the effects of the yen’s depreciation since 1995 manifest themselves.