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On Today's Decision at the Monetary Policy Meeting

September 18, 2002
Bank of Japan

(For immediate release)

  1. At the Monetary Policy Meeting (MPM) held today, the Bank of Japan decided to keep the guideline for money market operations unchanged (Attachment).
  2. Japan's economy has almost stabilized as a whole thanks to an export increase and the associated expansion of production. Overall, financial market developments have been quite stable against the background of abundant liquidity provision by the Bank.
  3. It should be noted, however, that stock prices in Japan, as in major markets abroad, have been volatile reflecting growing concern over global economic prospects. A stock price decline could affect expenditures by the corporate and household sectors through various channels. Moreover, given the current economic and financial situation, it could threaten the stability of financial markets and the financial system.
  4. Despite the currently stable liquidity demand of financial institutions, should there be unstable movements in financial markets, the Bank will always provide more liquidity irrespective of the current account balance target decided by the MPM. Financial institutions that hold current accounts with the Bank have already submitted sufficient amount of collateral.
  5. In order to prevent a continuous price decline and establish a basis for the stable and sustainable growth of Japan's economy, the Bank of Japan is determined to continue its utmost efforts as a central bank, including those to ensure financial system stability.

Attachment

September 18, 2002
Bank of Japan

At the Monetary Policy Meeting held today, the Bank of Japan decided, by unanimous vote, to maintain the following guideline for money market operations for the intermeeting period:The Bank of Japan will conduct money market operations, aiming at the outstanding balance of the current accounts at the Bank at around 10 to 15 trillion yen.

Should there be a risk of financial market instability, such as a surge in liquidity demand, the Bank will provide more liquidity irrespective of the guideline above.

(Reference)

Meeting hours :
September 17th: 14:00-15:51
September 18th:9:01-13:08

Members present :
Masaru Hayami ( Governor )
Sakuya Fujiwara ( Deputy Governor )
Yutaka Yamaguchi ( Deputy Governor )
Kazuo Ueda
Teizo Taya
Miyako Suda
Shin Nakahara
Hidehiko Haru
Toshikatsu Fukuma

(Others present)

September 17th:
From Ministry of Finance :
Hideto Fujii, Deputy Vice Minister for Policy Planning and Co-ordination
(14:00-15:51)

From Cabinet Office :
Yuzo Kobayashi, Vice-Minister for Economic and Fiscal Policy
(14:00-15:51)

September 18th
From Ministry of Finance :
Takayoshi Taniguchi, Senior Vice Minister of Finance
( 9:01-11:55, 11:58-13:08 )

From Cabinet Office :
Yuzo Kobayashi, Vice-Minister for Economic and Fiscal Policy
( 9:01-11:55, 11:58-13:08 )

Release of Monthly Report of Recent Economic and Financial Developments :
( Consisting of "The Bank's View" and "The Background" )
Japanese version of the entire report and English version of "The Bank's View"
2:00 p.m. on Thursday, September 19
English version of "The Background"
Within a few business days from the release of"The Bank's View"

Release of minutes :
2:00 p.m. on Tuesday, November 5