Against the backdrop of such developments in profits, overall investment plans in fiscal 1997 seem to be firm, especially in the manufacturing sector, although business fixed investment of smaller firms in the nonmanufacturing sector is expected to remain at a low level.
The conclusion was that in a very loose monetary environment, arbitrage behavior would weaken the effects of window guidance. On the other hand, monetary policy on its own could not complete the job. It would become more effective when monetary policy and micro-prudential policies are used in a complimentary fashion.