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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (30)	7/2/2000 10:30:06 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 10065

BOJ says must act promptly if price risks rise By Ami Miyazaki TOKYO, July 3 (Reuters) - Bank of Japan (BOJ) Governor Masaru Hayami said on Monday the BOJ must act pre-emptively to secure price stability to support sustainable economic growth in the medium-to-long term. "Even if measured inflation is stable, we need to promptly alter interest rates," if the bank judges there is a rising risk of damage to sustainable price stability, Hayami told an international conference sponsored by the BOJ's research arm. The speech, largely devoted to the lessons of Japan's late 1980s "bubble" economy of inflated asset prices, made no direct references to Japan's current economic conditions or monetary policy. "The most significant lesson that we should keep in mind is the importance of evaluating risks to the economy at an early stage and of dealing with them in a pre-emptive manner," Hayami said. The market is closely watching for clues as to when the central bank might end its unprecedented policy of guiding short-term interest rates to zero, adopted 16 months ago as an "emergency" measure to stave of deflation and bolster the flagging economy. The BOJ Policy Board last week voted to maintain that policy, but top central bank officials have begun preparing the market for an upward move in rates, which markets speculate could come as soon as the next board meeting on July 17. Hayami's speech acknowledged that loose monetary policy was partly to blame for the bubble economy, from which Japan's economy -- and especially its banking system -- are still struggling to recover. Some traders initially interpreted Hayami's reference to prompt action as yet another hint that a rate increase was on the way, although the markets generally played down his comments as a history lesson and focused instead on Tuesday's scheduled release of the BOJ's quarterly "tankan" corporate sentiment survey. The yield of Japan's benchmark 10-year government bond hit an 11-week high of 1.780 percent on Monday morning, amid expectations the tankan will show improved sentiment and provide another reason for the BOJ to scrap the zero-rate policy. The markets will also be watching for Monday's release of minutes of the Policy Board's May 17 monetary policy meeting, due at 2 p.m. (0500 GMT), for any clues that the board had moved closer to approving a rate increase. 21:48