The yield spread between private bonds (bank debentures and corporate bonds) and government bonds remains mostly unchanged. Stock prices fell sharply until the end of May triggered by the drop in U.S. stocks but have recovered thereafter. In the foreign exchange market, the yen temporarily rose to around 110 yen in mid-May but then strengthened against the U.S. dollar.
The yen is currently being traded in the range of 105-107 yen. With regard to corporate finance, private banks have basically retained their cautious lending attitude. However, constraint that had been caused by severe fund-raising conditions and insufficient capital base has eased considerably. Given this, major banks are becoming more active in extending loans, while carefully evaluating the credit risks involved.