In Japan, the stock market fell by a quarter in the last two years and has fallen further in the last few weeks; the yen first weakened then strengthened considerably in the last part of 1998. Last year the Korean stock exchange gained as much as it had lost in 1997.
These include: the strength of demand pressures; the evolution of inflation expectations; the impact on confidence of global economic uncertainties; and the way in which the war in Iraq affects demand and inflation, both globally and in Canada. The Bank continues to monitor all of these factors and will adjust monetary conditions to keep Canadian inflation low, stable, and predictable over the medium term.