Yields on long-term government bonds have recorded a historical low and stock prices remain soft. The yield differential between bonds issued by the private sector and those by the government, as well as the so-called “Japan premium”, has remained at the relatively high level and shown no significant decrease, indicating the continuing cautious attitudes of market participants toward credit risk.
With respect to monetary aggregates, the growth in M2+CDs, which had picked up from the end of 1997, slowed in March and April. Also, the growth in broadly-defined liquidity has been declining since the middle of 1997. 1 This report was written based on data and information available when the Bank of Japan Monetary Policy Meeting was held on May 19, 1998.