The series of RR cuts implemented in 2019, in addition to the BSP’s support for lending activities, are in line with our broad financial sector reform agenda to promote a more efficient financial system by lowering financial intermediation costs. Fifth, another key contributor to the 2019 growth performance was the improving external sector position of the country amid narrower trade deficit.
In terms of their impact on Japanese financial conditions, the adverse effects of subprime mortgage problems and the consequent volatility in global financial markets have so far been limited: the lending attitude of financial institutions has been positive; and the issuing environment for CP and corporate bonds has continued to be favorable.