Regarding financial system stability, the Japanese financial system has not suffered from internal factors, such as impaired assets at Japanese banks, compared to the U.S. and European counterparts. As for expectations for inflation rates over the medium to long term, survey results and various market data suggest that there has been no notable change.
Nevertheless, as balance-sheet adjustments are still continuing on a global basis, resultant risks to financial system stability are unlikely to disappear in the near future.