Meanwhile, in the foreign exchange market, the yen’s exchange rate against the U.S. dollar has been depreciating since autumn 2012, when it was around 80 yen to the dollar, and has recently been around 100 yen (Chart 6). Monetary easing aims at overcoming deflation and by no means intends to maneuver the exchange rate. Nonetheless, monetary easing will exert pressure toward depreciation ceteris paribus.
Lastly, firms’ and households’ financial conditions have been accommodative. That is, with regard to funding conditions, the diffusion index (DI) for financial institutions’ lending attitudes as perceived by firms was on an improving trend in the Tankan survey (Short-Term Economic Survey of Enterprises in Japan), and issuing conditions for CP and corporate bonds have remained favorable on the whole.