Concrete measures to improve the functioning of credit markets need to be taken by both the private and public sectors: for example, the establishment of uniform loan contracts, and a wider use of covenants covering cases of deterioration in credit quality. Improving the functioning of the Japanese government securities (JGS) market would also help secure the sound development of credit markets.
The overall asset mix has been largely unchanged, with funds primarily invested in debt securities, followed by equities and deposits in banks. Nonetheless, we have observed a significant increase in investments in corporate debt and equity securities, which rose year-on-year by 18.8 percent and 39.0 percent, respectively.