Minutes of the Monetary Policy Meeting

on November 26, 1999
(English translation prepared by the Bank staff based on the Japanese original)

January 20, 2000
Bank of Japan

A Monetary Policy Meeting of the Bank of Japan Policy Board was held in the Head Office of the Bank of Japan in Tokyo on Friday, November 26, 1999, from 9:00 a.m. to 12:48 p.m.¹

Policy Board Members Present
Mr. M. Hayami, Chairman, Governor of the Bank of Japan
Mr. S. Fujiwara, Deputy Governor of the Bank of Japan
Mr. Y. Yamaguchi, Deputy Governor of the Bank of Japan
Mr. S. Taketomi
Mr. T. Miki
Mr. N. Nakahara
Ms. E. Shinotsuka
Mr. K. Ueda

Government Representative Present
Mr. Y. Hayashi, State Secretary for Finance, Ministry of Finance²
Ms. Y. Koike, Senior State Secretary for Economic Planning, Economic Planning Agency

Reporting Staff
Mr. I. Kuroda, Executive Director
Mr. M. Matsushima, Executive Director
Mr. S. Nagata, Executive Director
Mr. I. Yamashita, Director, Financial Markets Department
Mr. S. Murayama, Director, Research and Statistics Department
Mr. E. Hirano, Director, International Department
Mr. N. Inaba, Advisor, Policy Planning Office
Mr. M. Amamiya, Chief Manager, Planning Division 1, Policy Planning Office
Mr. T. Yoshida, Research and Statistics Department

Secretariat of the Monetary Policy Meeting
Mr. K. Koike, Director, Secretariat of the Policy Board
Mr. T. Murayama, Advisor to the Governor, Secretariat of the Policy Board
Mr. S. Hida, Manager, Secretariat of the Policy Board
Mr. T. Kurihara, Manager, Policy Planning Office
Mr. S. Uchida, Manager, Policy Planning Office

The minutes of this meeting were approved by the Policy Board at the Monetary Policy Meeting held on January 17, 2000, as "a document which contains an outline of the discussion at the meeting" stipulated in Article 20, Paragraph 1 of the Bank of Japan Law of 1997. Those present are referred to by their titles at the time of the meeting.
Mr. Hayashi was present from 9:00 a.m. to 12:34 p.m.

I. Approval of the Minutes of the Monetary Policy Meeting Held on October 27, 1999

The Policy Board approved unanimously the minutes of the Monetary Policy Meeting, the "Green Paper," of October 27, 1999 for release on December 1, 1999.

II. Summary of Staff Reports on Economic and Financial Developments³

A. Money Market Operations in the Intermeeting Period

Market operations in the intermeeting period were conducted in accordance with the guideline determined at the meeting on November 12.⁴ Throughout the period, the Bank announced a "morning projection for reserves" of an excess of 1 trillion yen, and as a result, the overnight call rate was stable at 0.03 percent. ⁵

Three conspicuous developments were observed during the intermeeting period.

First, interbank rates on instruments maturing beyond the year-end, which had been on an upward trend due to concerns over the Year 2000 problem, were gradually losing upward momentum. This was because the anxiety over unexpected problems occurring around the turn of the year had been alleviated by the following factors: (1) the Bank's active provision of funds maturing beyond the end of the year through market operations; and (2) comments by the Governor at a November 16 press conference on the Bank's stance toward extending loans to financial institutions with Year 2000-related liquidity problems --"With regard to collateralized loans, the Bank has no intention of restricting the amount or of seeking to make the management of the borrowing institution take responsibility."

Second, yields of interest rate futures--mainly distant contracts such as those for June 2000 delivery--started to rise. This could be attributed to a view spreading among some market participants that the zero interest rate policy would be terminated in the near future given the upward revision of the OECD's forecast for Japan's economic growth and the further rise in Japanese stock prices.

Third, yields on short-term Japanese government securities (JGSs) rose, reflecting a decline in demand for collateral from major financial institutions, which had made smooth progress in procuring funds maturing beyond the year-end.

3Reports were made based on information available at the time of the meeting.
4The guideline was as follows:
The Bank of Japan will flexibly provide ample funds and encourage the uncollateralized overnight call rate to move as low as possible.
5The "morning projection for reserves" is defined as a projection of the "daily excess/shortfall of reserves" announced by the Bank each morning. The "daily excess/shortfall of reserves"--which is affected by the Bank's market operations of the day--is the amount by which reserves exceed/fall short of the "remaining required reserves" (the daily average of reserves that should be deposited in the remaining days of the reserve maintenance period) at 5:00 p.m., when reserves are officially calculated.

B. Recent Developments in Foreign Exchange Markets and Overseas Economic and Financial Conditions

1. Developments in foreign exchange markets

Since the previous meeting, the yen had depreciated slightly against the U.S. dollar in response to the release on November 12 of third-quarter U.S. productivity indicators, which helped alleviate inflationary concerns, then appreciated in late November due partly to strength in Japanese stock prices.

Meanwhile, the euro fell sharply against both the U.S. dollar and the yen and remained at record-low levels. This was due to the following factors. First, market participants focused on the robust U.S. economy and on signs of a recovery in Japan's economy. Second, relatively weak economic data were released in the euro area after the European Central Bank (ECB) raised its repo rate. And third, concerns over a delay in structural reforms in Germany emerged as the government there moved to rescue major firms.

2. Overseas economic and financial developments

In the United States, the Federal Open Market Committee (FOMC) raised its target for the federal funds rate by 0.25 percentage point on November 16 to keep inflationary imbalances in check and to sustain the economic expansion. Since then, long-term interest rates had started to rise and yields of federal funds rate futures had increased. U.S. stocks, mainly high-tech stocks, were still on an upward trend despite the increase in interest rates.

The recovery in East Asian economies became more distinct. GDP data for the July-September quarter that were released in the intermeeting period showed that Korea and Malaysia achieved higher growth than the previous quarter, Singapore maintained strong growth, and Taiwan, in spite of an earthquake, attained year-to-year growth of around 5 percent. In Indonesia, concerns remained over the country's political and social stability as independence movements escalated in parts of the nation including the province of Aceh.

C. Economic and Financial Developments in Japan

1. Economic developments

Economic indicators released in the intermeeting period offered no grounds to change the Bank's view that Japan's economy, which had stopped deteriorating, was turning to improve, with exports and production increasing, but clear signs of a self-sustained recovery in private demand had not been observed yet.

Real exports decreased in October after growing sharply in the July-September quarter. A breakdown showed that exports to the United States plunged due mainly to a decrease in automobile exports while those to China dropped due to a decline in exports of capital goods and intermediate materials. Exports to ASEAN countries slipped led by a fall in equipment related to information technology (IT). The dip in exports of automobiles and IT-related equipment was likely to have been a temporary phenomenon, and thus, there was no need to change the assessment of the general trend in exports. Real imports also decreased in October. As for the outlook for the October-December quarter, growth in imports was likely to be modest judging from the fact that the pace of production during the period was expected to slow compared to the July-September quarter.

Private consumption on the whole continued to show mixed developments. For example, department store sales and other retail sales were fairly strong in October after relatively weak sales in September.

2. Financial developments

In the intermeeting period, the latest data on money stock and corporate bankruptcies were released.

The year-to-year growth rate of money stock (M2+CDs) increased somewhat in October to 3.5 percent from 3.3 percent in September. This could be attributed to a smaller decline than before in borrowing from private financial institutions, but the basic trend in money stock seemed unchanged. The number of corporate bankruptcies grew slightly in October due to an increase in failures of firms that had been supported by the special loan guarantee system.

Recently, stock prices had increased their tendency to move in line with developments in U.S. stocks. Helped by a rise in the U.S. market, Japanese stocks rose, especially technology-related stocks such as electronics and telecommunications. The yen and long-term interest rates also rose somewhat. Financial market participants' attention seemed to have shifted to the economic fundamentals of Japan from concerns over the supply and demand balance of Japanese government bonds (JGBs) and inflationary pressures in the United States.

III. Summary of Discussions by the Policy Board on Economic and Financial Developments

A. The Current Economic Situation and the Outlook

Members' discussion was focused mainly on the assessment of economic indicators released since the previous meeting on November 12. Members generally agreed that there were no factors that changed their basic judgment of the economic situation.

A few members expressed the view that, although both exports and imports fell in October, exports would continue to be on an upward trend in the future given the increasingly evident worldwide economic expansion. One of these members noted that the growth in export markets had offset to a great extent the downside impact on exports of the surge in the yen since July. Regarding this comment, a member pointed out that the appreciation of the yen had contributed to the recovery in Asian economies. Meanwhile, another member noted that the exchange rate, if it stayed at the current level, would place substantial downside pressure on exports in the future considering that the average exchange rate of the yen in the first half of fiscal 1999 was at the 117-118 yen level.

Many members expressed the view that public investment was certain to underpin the economy through the first half of 2000 since the government proposal for the second supplementary budget had been formulated. One of them, however, added that attention should be paid to the fact that local governments were reducing their independent public works.

As for corporate profits, one member commented that the effects of restructuring were appearing faster than expected, on the grounds that the semiannual financial reports of listed companies revealed larger-than-predicted current profits although sales had declined as projected. On this basis, the member expressed a positive view that a firm recovery in corporate profits had begun even with the recent appreciation of the yen. In contrast to the above view, a different member stated that firms had managed to make a profit by reducing costs through restructuring and a self-sustained recovery in private demand would be required for a full-fledged recovery in corporate profits.

In view of these conditions, members generally agreed that the economy was turning and starting to improve with exports and production increasing and there were some bright signs in corporate profits and employment conditions. One member commented that it was necessary to monitor closely whether these improvements would stimulate corporate and household spending and in turn further strengthen the growth in production and income.

Members generally shared the view that private consumption continued to show mixed developments judging from indicators released since the previous meeting. One member noted that there was a moderate recovery in domestic car sales, citing examples of upward revision of production plans by carmakers. This member, however, stated that improvement in private consumption on the whole was at a pause. In relation to the outlook for private consumption, one member expressed the opinion that attention should be paid to whether there would be a clear recovery in employment and income conditions, which were the basis of private consumption. Another member pointed out that consumer sentiment was improving rapidly according to the Bank's opinion survey on lifestyle and financial behavior.

With regard to business fixed investment, which appeared to be bottoming out in manufacturing industry, one member expressed the view that it warranted attention whether this favorable development would spread to nonmanufacturing sectors. In contrast to this, another member was of the opinion that a recovery in business fixed investment as a whole could still not be expected, citing an analysis of investment by purpose. The member explained that, although an increase in maintenance and repair investment could be expected, investment aimed at cutting labor and other costs was unlikely to expand further since such investment was already at a high level, and investment to increase capacity seemed to be on a downward trend. Another member remarked that it would take a considerable time for firms in most industries to eliminate excess capacity. The member added that adjustment of excess labor and excessive liabilities would be completed only in the distant future because this would take firms a long time after they had completed their adjustment of excess capacity.

On the basis of these discussions, many members were of the opinion that they should keep a close watch on the results of various surveys of business fixed investment plans, leading indicators, and other information about firms, including anecdotal evidence, to see how the improvement in corporate profits was encouraging business fixed investment.

In relation to this view, a few members commented that the business cycle and the effect of business fixed investment on the economy might show a different pattern from the past since the contrast between strong industries such as IT-related industries and weak ones was becoming increasingly noticeable. One of these members stated that, based on the above understanding, it was important to carefully monitor not only macroeconomic indicators but also anecdotal evidence for developments in individual industries.

One member, citing the recent accidents and problems in the nuclear power and aerospace industries, expressed concerns that corporate restructuring might impair firms' basic technology and quality control and thereby damage the foundation of the international competitiveness of Japan, a country whose economy relied on international trade and technological advances.

Taking account of these factors, members generally shared the view that clear signs of a self-sustained recovery in private demand were not yet observed.

Members generally agreed that prices would remain flat in the immediate future, but downward pressure persisted given the prevailing economic conditions. One member noted that it would require close monitoring whether reductions in firms' purchase prices of materials and production parts accompanying their restructuring would exert pervasive influence on the prices of goods traded between firms. In contrast, another member expressed a positive view that the risk of a downtrend in prices seemed to have lessened, citing the fact that the pace of year-to-year decline in the Corporate Service Price Index (CSPI), which had continued to fall, had slowed in October.

One member stated that there was a possibility that the conditions surrounding asset prices might change drastically. The member pointed out that (1) the number of land transactions was bottoming out, and (2) good-quality office buildings, whose returns were increasing, could attract mutual funds and foreign investors. The same member further commented that "quasi-bubble" phenomenonna such as robust sales of luxury apartments were observed under the zero interest rate policy. However, some argued that the situation could not be characterized as a "quasi-bubble" on the grounds that (1) land prices on average were still on a downtrend, and (2) strong sales of luxury apartments were due largely to a fall in their prices. Meanwhile, a few members stated that, while the objective of monetary policy was to achieve the stability of prices of goods and services, careful attention should be paid to the development of stock and land prices.

One member brought up developments in crude oil prices as a risk to the economic outlook. This member commented that stocks of crude oil in the United States were decreasing and if the embargo on oil exports from Iraq, whose production accounted for about 10 percent of the total of OPEC, was prolonged, oil prices might shoot up toward winter.

B. Financial Developments

On the financial front, members mainly discussed developments in long-term interest rates, stock prices, and the yen's exchange rate.

Regarding developments in long-term interest rates, some members commented that a rise in the rates in the course of an economic recovery should be accepted. One of these members expressed the view that, considering the firmness of stock prices, the current increase in long-term interest rates could be reflecting the improvement in the market's view of Japan's economy. This member stated that it was necessary to gain the public's understanding that the rise of this kind would therefore not hamper an economic recovery. Another member noted that, while a rise in interest rates accompanying an economic recovery would not be a problem, one triggered by speculation or by an increase in interest rates in the United States or Europe would require close attention. In relation to this point, one member pointed out that long-term interest rates in Japan, the United States, and Germany had continued to fall since 1990, but the trend had turned upward at some point between late 1998 and early 1999.

With regard to exchange rate developments, one member expressed the view that concerns about inflation in the United States had subsided somewhat and the foreign exchange market had stabilized. The member continued that, however, the U.S. economy had not shown signs of deceleration, and therefore, a risk remained that the market would become unstable again. Another member pointed out that exchange rates might become volatile due to speculative transactions taking advantage of thin trading amid concerns about the Year 2000 problem.

It was pointed out that the firmness in the stock market was attributable to the improvement in the market's view of the economy and alleviation of concerns about a possible fall in U.S. stock prices. One member remarked that stocks of some growth industries, such as IT-related sectors, were pushing up overall stock prices, and that these industries might start to serve as the new engine of economic growth. However, this member also stated that such a development in the stock market warranted attention, because a rise in the stock prices of specific sectors could kindle an overshooting of expectations. In relation to this point, another member commented that high stock prices would undoubtedly have positive effects on corporate and household sentiment, but with the sharp contrast between sectors, it should be noted that such effects would be concentrated in specific areas.

Meanwhile, a few members expressed the view that, although interest rates on term instruments maturing beyond the year-end seemed to have lost upward momentum, the Bank should continue providing ample year-end funds to dispel unnecessary concerns in the market.

IV. Summary of Discussions on Monetary Policy for the Immediate Future

Based on the above assessment of the economic and financial situation, members discussed the monetary policy stance for the immediate future.

As mentioned earlier, members generally agreed that it was not necessary to substantially change their judgment on the economic situation from the previous meeting.

One member, however, remarked that, in deciding monetary policy, it was important to examine economic and financial developments, which were gradually showing signs of improvement, from the perspective of whether they were still compatible with the zero interest rate policy. A few members noted the need for forward-looking monetary policy, pointing out that it would be too late to change policy after the inflation rate had started to rise. However, many members including the above members remarked that it was justifiable to wait for more information on the economy before judging whether private demand could be expected to return to a self-sustained recovery path.

Following the above discussion, the majority of members concluded that, with regard to monetary policy for the immediate future, it was appropriate to continue the zero interest rate policy in line with the Bank's stance to maintain the extremely easy monetary policy until deflationary concern had been dispelled.

Two members objected to the majority opinion to continue the zero interest rate policy.

The first member claimed that the guideline for money market operations should be changed back to that employed before the monetary easing in February 1999--that is, the overnight call rate target should be raised to 0.25 percent.

The member explained that monetary policy should be forward-looking and it would be too late to take action after economic indicators showed a clear recovery in private demand.

In relation to this view, one member, acknowledging the need for forward-looking policy measures, noted the importance of thoroughly analyzing available information to project the future inflation rate. The member further commented that, in the economic situation at the time, the risk of damaging the economy by raising interest rates was greater than the risk of inflation occurring in the near future.

Another member questioned the appropriateness of tightening monetary policy back to the level before February 12 amid concerns about the Year 2000 problem. In response to this, the member who advocated monetary tightening remarked that the Year 2000 problem was not a significant obstacle to the tightening, on the following grounds. First, the Bank had already taken various measures for the Year 2000 problem and their effects were permeating the markets. And second, central banks in the United States and Europe had tightened monetary policy to alleviate concerns over inflationary risks, even though they, like Japan, faced the Year 2000 problem.

The second member who objected to the majority opinion advocated adopting monetary base targeting accompanied by a target for the inflation rate.

The member gave the following reasons for setting a target for the rate of increase in the consumer price index (CPI). First, it had the advantage of giving monetary policy discipline and preventing political intervention. Second, having the responsibility to pursue price stability, the Bank should increase its accountability for the consequences by establishing a numerical target. And third, projecting future developments in prices and the economy would make monetary policy more forward-looking and preemptive. The member claimed that, even if the Bank did not adopt CPI targeting immediately, the Bank should at least announce its projection for the CPI and GDP growth rate as the Federal Reserve did. Asked by one member what level of increase this member projected for the CPI, the member replied that the year-on-year increase in the CPI was expected to be around zero percent in two years' time if no additional monetary policy measures were taken. The member also commented that the member's projection for the rate of increase in the CPI in a year's time was more cautious than that of the member who had asked about the projection for the CPI. The member concluded that a target range of 0.5 to 2.0 percent for the year-on-year increase in the CPI was moderate considering the upward bias of the CPI, and that the Bank would not be fulfilling its responsibility if it could not achieve the target.

The member added that the time frame for monetary base targeting should be two to three quarters so that the target could be achieved by increasing excess reserves by about 500 billion yen each reserve maintenance period. The member also explained that the CPI target should be achieved in the October-December quarter of 2001, taking into account the time lag in the permeation of the effects of monetary policy. As for the relationship between the target for the monetary base and the inflation rate, the member remarked that the Bank could take measures such as raising the target for the monetary base if this was deemed necessary in view of the economic and financial conditions after adopting the new scheme of quantitative targeting.

On this point, one member pointed out that (1) the relationship between the growth of the monetary base and the medium- to long-term inflation rate was extremely unstable, and (2) under the zero interest rate policy, the effects of monetary easing expected from increasing the monetary base were very limited. The member further commented that the suggested measure would have little effect and it was extremely uncertain whether the Bank could achieve the targeted inflation rate in two years' time. The member opposed the proposal pointing out that the credibility of the Bank could be harmed if it was not able to achieve the target.

V. Remarks by Government Representatives

The representative from the Ministry of Finance made the following remarks.

(1) Japan's economy had passed the worst point, and was improving moderately due to the influence of the economic recovery in Asia as well as the effects of various policy measures. However, the momentum for a recovery in private demand, which was the key to a self-sustained recovery of the economy, remained weak. In these circumstances, the Government decided on the Policy Measures for Economic Rebirth on November 11, and following this, a second supplementary budget for fiscal 1999 was decided at a Cabinet meeting on November 25. The total amount of the general account budget for fiscal 1999 was 89,018.9 billion yen, an increase of 6,789.0 billion yen compared with the amount after the first supplementary budget. The Government would implement the Policy Measures for Economic Rebirth steadily in order to realize a smooth shift from public to private sector led-growth, steering the economy toward a full-fledged recovery, and establishing a solid new foundation for economic development in the long run.

(2) In line with the implementation of various fiscal policy measures, the Government would like to ask the Bank to continue implementing monetary policy appropriately and in a timely manner to ensure a recovery of the economy, for example by flexibly providing ample funds in the market giving due consideration to developments in the financial markets, including the foreign exchange markets.

The representative from the Economic Planning Agency made the following remarks.

(1) Japan's economy had not yet got out of its severe situation, as the momentum for a recovery in private demand remained weak. However, activities continued to improve moderately due to the influence of the economic recovery in Asia as well as the effects of various policy measures. In this situation, the Government decided on the Policy Measures for Economic Rebirth. This was aimed at realizing a smooth shift from public to private sector led-growth, steering the economy toward a full-fledged recovery, and establishing a solid new foundation for economic development in the 21st century. The Government would strongly promote the implementation of this package.

(2) The Government would like to ask the Bank to continue implementing monetary policy appropriately and in a timely manner to ensure a recovery of the economy, for example by flexibly providing ample funds in the market giving due consideration to developments in the financial markets, including the foreign exchange markets.

VI. Votes

The views of many members of the economic and financial situation were summarized as follows. First, Japan's economy, which had stopped deteriorating, was turning to improve. Second, the effects of monetary easing were permeating the economy. Third, however, clear signs of a self-sustained recovery in private demand had not yet been observed. And fourth, the situation had thus not changed much from the previous meeting, and deflationary concern had not been dispelled yet.

Based on this understanding, the majority of members considered it appropriate to maintain the zero interest rate policy for the immediate future and ensure further permeation of the effects of monetary easing.

Meanwhile, one member proposed raising the overnight call rate, and another proposed adopting an apparent quantitative targeting accompanied by a target for the rate of increase in the CPI.

As a result, three policy proposals were put to the vote.

Ms. Shinotsuka proposed the following as the guideline for money market operations for the intermeeting period ahead:

The Bank of Japan will encourage the uncollateralized overnight call rate to move on average around 0.25 percent.

Regardless of the above target for the call rate, the Bank of Japan will provide more ample funds, if judged necessary, to maintain the stability of the financial markets.

The proposal was defeated with one vote in favor, seven against.

Mr. Nakahara proposed the following as the guideline for money market operations for the intermeeting period ahead:

The Bank of Japan will aim at realizing a 0.5 to 2.0 percent annual increase in the consumer price index (excluding perishables) in the October-December quarter of 2001 as a medium-term target. In achieving this target, the Bank will increase the amount of excess reserves by about 500 billion yen in the current reserve maintenance period from November 16 through December 15 (change in the average amount outstanding from the previous reserve maintenance period to the current maintenance period), and by continuing to increase the amount thereafter, induce approximately 10 percent annual growth of the monetary base (change from the average for the July-September quarter of 1999 to the average for the same quarter of 2000) to realize quantitative easing (expansion of the monetary base).¹ Regardless of the above target for the monetary base, the Bank will expand money further should the financial markets destabilize, for example, should the uncollateralized overnight call rate rise substantially.

Note:1. To realize approximately 10 percent annual growth of the monetary base (change from the average for the July-September quarter of 1999 to the average for the same quarter of 2000), the Bank will need to increase reserves by about 3 trillion yen by the end of September 2000 through market operations if it is assumed that the current annual growth in banknotes, which is about 6 percent, will continue.

The proposal was defeated with one vote in favor, seven against.

To reflect the majority view, the chairman formulated the following proposal.

Chairman's Policy Proposal:

The guideline for money market operations in the intermeeting period ahead would be as follows, and publicized by the attached statement (see attachment).

The Bank of Japan will flexibly provide ample funds and encourage the uncollateralized overnight call rate to move as low as possible.

Votes for the proposal: Mr. M. Hayami, Mr. S. Fujiwara, Mr. Y. Yamaguchi, Mr. S. Taketomi, Mr. T. Miki, and Mr. K. Ueda.

Votes against the proposal: Mr. N. Nakahara and Ms. E. Shinotsuka.

Ms. Shinotsuka dissented for the following reasons. First, factors suggesting brighter prospects for the economy were becoming conspicuous, and concerns over the global economy seemed to be shifting in general from deflation to inflation. Second, the recent rise in long-term interest rates reflected expectations of an economic recovery and differed significantly in nature from the increase in the rates before the zero interest rate policy was adopted in February 1999. Third, it would be too late to raise the overnight call rate after economic indicators started showing definite signs of improvement. And fourth, market participants were gradually anticipating the termination of the zero interest rate policy.

Mr. Nakahara voted against the chairman's proposal on the following grounds. First, the momentum for an economic recovery was extremely weak. Second, further monetary easing action by the Bank was expected overseas and the Bank should synchronize such action with the Government's Policy Measures for Economic Rebirth. Third, the yen could appreciate further, possibly to 100 yen to the U.S. dollar, and the export volume could decline as a result. Fourth, growth of money stock and the monetary base was slowing. Fifth, under the current policy framework targeting the overnight call rate, the Bank would not be able to deal with external shocks. And sixth, the monetary policy framework should be expressed in terms of a specific numerical target instead of ambiguous language.

Attachment

For immediate release

November 26, 1999
Bank of Japan

At the Monetary Policy Meeting held today, the Bank of Japan decided, by majority vote, to maintain its "zero interest rate policy" to assure permeation of the effects of monetary easing.

The guideline for money market operations in the inter-meeting period ahead is as follows: