ZEN/CAD

At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period: The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5 percent. Japan's economy has recovered moderately, although some weakness has been seen in part. Overseas economies have grown moderately on the whole. Exports and industrial production have been more or less flat. With an improving trend in corporate profits, business fixed investment has been ona moderate increasing trend. The employment and income situation has improved moderately. Private consumption has been on a moderate increasing trend despite the impact of price rises and other factors. Housing investment has been relatively weak. Public investment has been more or less flat. Financial conditions have been accommodative. On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 3.0-3.5 percent recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, and as the government's measures to reduce the household burden of higher energy prices have been scaled back, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately. post: BOJ: JAPAN'S ECONOMY RECOVERING MODERATELY, ALBEIT WITH SOME WEAK SIGNS CONSUMPTION INCREASING MODERATELY AS A TREND INFLATION EXPECTATIONS HEIGHTENING MODERATELY MUST BE VIGILANT TO IMPACT OF FINANCIAL, FX MARKET MOVES ON JAPAN'S ECONOMY EXPECT UNDERLYING INFLATION TO… post: BOJ: RISKS INCLUDE TRADE POLICY OF EACH COUNTRY AND ITS IMPACT ON OVERSEAS ECONOMIES, PRICES post: BOJ: Uncertainties High Over Japan Economy, Prices post: BOJ: JAPAN'S ECONOMY LIKELY TO CONTINUE GROWING ABOVE POTENTIAL