For financial stability, very depressed funding rates may incentivise sovereign bond holders to engage in more risk-taking, and banks to tilt their funding structures towards less stable wholesale funding. These risks have not materialised so far. Now, how likely are they to materialise? In other words, how persistent could current conditions prove?
At the macroeconomic level, looking at Japan's economy as a whole, it is important for economic metabolism -- or business entry and exit rates -- to rise, which will lead to a greater proportion of firms with high productivity. Likewise, it is vital that labor mobility be invigorated so that more people will be working in highly productive firms and sectors.