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Bank of Japan Board: Stick to Policy Steps for Now
By: Reuters | 18 Jun 2009 | 08:31 PM ET
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Many Bank of Japan board members said the central bank should continue to steadily implement the various policy steps it has taken so far as financial conditions remained tight, minutes of the central bank's May 21-22 meeting showed on Friday.

Katsumi Kasahara / AP

One board member also said attention should be paid to movements in longer-term interest rates because they could become more volatile due to an increase in issuance of government bonds.

At the May meeting, the BOJ upgraded its economic assessment and decided to accept foreign sovereign debt as collateral for its market operations.

The central bank upgraded its economic view again at a subsequent meeting in June as rises in exports and output heightened views the worst of the recession may be over.

The fading pessimism has led to market views that the BOJ may end its unconventional steps to ease corporate funding strains, such as buying commercial paper and corporate bonds from banks, when they expire in September.

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It has kept interest rates on hold at 0.1 percent since December last year, when it cut them from 0.3 percent.

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