On the one hand, the actions needed to restore market liquidity may blur monetary policy signals; on the other, decisions on interest rates could be interpreted as revealing information unknown to the market, thus exacerbating tensions.
Regarding public-sector investment, the amount of public works contracted has followed a decreasing trend reflecting the restrained budget for fiscal 1997. Against the background of steady overseas demand and the yen’s depreciation to date, real exports remained high in the third quarter 1997, although they decreased somewhat from the second quarter when exports showed a significant rise. Real exports rose again in October.