This is the unedited press release from Bank of Japan



Policy Board Members Present:
Mr. T. Fukui, Chairman, Governor of the Bank of Japan
Mr. T. Muto, Deputy Governor of the Bank of Japan
Mr. K. Iwata, Deputy Governor of the Bank of Japan
Ms. M. Suda
Mr. A. Mizuno
Mr. K. G. Nishimura
Mr. T. Noda
Mr. S. Nakamura
Mr. H. Kamezaki
Government Representatives Present
Mr. M. Suzuki, Deputy Vice Minister for Policy Planning and Coordination, Ministry
of Finance
Mr. J. Hamano, Vice Minister for Policy Coordination, Cabinet Office
Reporting Staff
Mr. N. Inaba, Executive Director
Mr. A. Horii, Executive Director (Assistant Governor)
Mr. K. Ido, Executive Director
Mr. M. Amamiya, Director-General, Monetary Affairs Department
Mr. S. Uchida, Associate Director-General, Monetary Affairs Department
Mr. T. Sekine, Senior Economist, Monetary Affairs Department
Mr. H. Nakaso, Director-General, Financial Markets Department.

Mr. K. Momma, Director-General, Research and Statistics Department

Mr. E. Maeda, Associate Director-General, Research and Statistics Department

Mr. T. Idesawa, Director-General, International Department

Secretariat of the Monetary Policy Meeting

Mr. K. Osugi, Director-General, Secretariat of the Policy Board

Mr. K. Shigyoh, Director, Deputy Head of Secretarial Services for the Board, Secretariat
of the Policy Board

Mr. A. Otani, Senior Economist, Monetary Affairs Department

Mr. K. Nakamura, Senior Economist, Monetary Affairs Department

Summary of Staff Reports on Economic and Financial Developments

Money Market Operations in the Intermeeting Period

The Bank conducted money market operations in accordance with the guideline decided at the previous meeting on January 21 and 22, 2008. 3 As a result, the uncollateralized overnight call rate had been at around 0.5 percent.

Recent Developments in Financial Markets

In the money market, while Euroyen rates and interest rates on term instruments, such as yields on financing bills (FBs) and treasury bills (TBs), had been more or less flat, interest rates on Euroyen futures increased slightly reflecting demand for funds maturing beyond the fiscal year-end. Japanese stock prices fluctuated widely following unstable U.S. and European stock prices. They had recently risen, and the Nikkei 225 Stock Average had been in the range of 13,000-14,000 yen recently.

Long-term interest rates had risen since the previous meeting, continuing to follow those in the United States and Europe. They had recently been in the range of 1.4-1.5 percent. The yen remained more or less unchanged against the U.S. dollar, and had recently been traded in the range of 107-108 yen against the dollar.

Overseas Economic and Financial Developments

A slowdown in the U.S. economy had become more evident in a situation where financial institutions had been applying tight lending standards to a broader range of borrowers. Business fixed investment remained on a gradual uptrend. Housing investment continued to decrease substantially, and the decline in home prices had accelerated due to excessive inventories of unsold homes. Private consumption continued to increase, but the slowing of the pace of increase had recently become clearer. In this situation, production in the manufacturing sector had continued to be weak, and an indicator relating to the activity of the nonmanufacturing sector, which was previously firm, had shown sharp deterioration recently.