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Change in the Guideline for Money Market Operations

January 20, 2004
Bank of Japan

(For immediate release)

  1. At the Monetary Policy Meeting held today, the Bank of Japan decided to change the main operating target in the guideline for money market operations. The target balance of current accounts held at the Bank was raised from 'around 27 to 32 trillion yen' to 'around 30 to 35 trillion yen' (see attachment).
  2. Japan's economy is recovering gradually, and is anticipated to continue recovering. Given persisting structural problems, such as debt overhang, the pace of recovery is expected to remain moderate. Consumer prices are projected to be on a slightly declining trend as the output gap continues to exist despite a gradual improvement. In the meantime, developments in financial and foreign exchange markets and their impact warrant close monitoring.
  3. Based on the above assessment of the economic and financial situation, the Bank judged it appropriate to raise the target balance of current accounts held at the Bank in order to reaffirm its policy stance to overcome deflation and ensure a continued recovery.

Attachment

January 20, 2004
Bank of Japan

At the Monetary Policy Meeting held today, the Bank of Japan decided, by majority vote, to set 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 current accounts held at the Bank at around 30 to 35 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 above target.

(Reference)

Meeting hours :
January 19th : 14:00-15:41
January 20th : 9:00-12:40

Members present:
Toshihiko Fukui ( Governor )
Toshiro Muto ( Deputy Governor )
Kazumasa Iwata ( Deputy Governor )
Kazuo Ueda
Teizo Taya
Miyako Suda
Shin Nakahara
Hidehiko Haru
Toshikatsu Fukuma

(Others present)

January 19th:
From Ministry of Finance:
Hiroki Tsuda, Deputy Vice Minister for Policy Planning and Co-ordination (14:00-15:41)

From Cabinet Office:
Yoshirou Nakajou, Director General for Economic and Fiscal Management (14:00-15:41)

January 20th:
From Ministry of Finance:
Keiichi Ishii, Senior Vice Minister of Finance (9:00-12:10, 12:14-12:40)

From Cabinet Office:
Tatsuya Ito, Senior Vice Minister for Economic and Fiscal Policy (9:00-12:10, 12:14-12:40)

Release of Monthly Report of Recent Economic and Financial Developments:
(Consisting of "The Bank's View" and "The Background")

"The Bank's View"3:00 p.m. on Tuesday, January 20
Full text (Consisting of "The Bank's View" and "The Background")2:00 p.m. on Wednesday, January 21 (Japanese)
4:30 p.m. on Thursday, January 22 (English)

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