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Change in the Guideline of Money Market Operations and Reduction in the Official Discount Rate

February 28, 2001
Bank of Japan

(For immediate release)

  1. At the Monetary Policy Meeting held today, the Bank of Japan has decided on the following policies.
    1. a) Change in the guideline of money market operations (by majority vote)
      Encourage the uncollateralized overnight call rate to move on average around 0.15 percent.
    2. b) Reduction in the official discount rate (by majority vote)
      Reduce the official discount rate to 0.25 percent, effective on March 1, 2001.
  2. The pace of ongoing economic recovery in Japan has been slowing further against the background of deceleration of overseas economic growth and declines in domestic stock prices.Uncertainty over economic prospects has also increased.At the same time, prices have been displaying weak developments, and there is a renewed concern that downward pressure on prices stemming from weak demand might intensify.
  3. In light of these developments, the Bank of Japan decided on the policy measures above for the purpose of strengthening further the Bank's support for economic recovery as well as ensuring price stability.
  4. With a view to restoring Japan's economy on an autonomous growth path led by private demand, the Bank will continue to conduct monetary policy in a timely and flexible manner.
  5. In order to ensure a sustainable recovery of Japan's economy, structural reforms in the financial system as well as in the area of economy and industry are essential.The Bank strongly hopes that such reform efforts accelerate further in a variety of fields.


Meeting hours : 9:01 a.m. to 3:48 p.m.

Members present :
Masaru Hayami (Chairman, Governor)
Sakuya Fujiwara (Deputy Governor)
Yutaka Yamaguchi (Deputy Governor)
Susumu Taketomi
Toshio Miki
Nobuyuki Nakahara
Eiko Shinotsuka
Kazuo Ueda
Teizo Taya

(Others present)

From Ministry of Finance:
Masatoshi Wakabayashi, Senior Vice Minister (9:01 a.m. to 10:57 a.m.)
Yoshio Tamura, Deputy Vice Minister for Policy Planning and Coordination (from 10:57 a.m.)

From Cabinet Office:Yuzo Kobayashi, Director General for Economic and Fiscal Management (from 9:01 a.m.)

Release of minutes :
2:00 p.m. on Wednesday, April 18, 2001