Conditions in money markets in the United States and European countries turned volatile because of increased counterparty risks among financial institutions, and central banks have aggressively supplied funds to these markets. The Japanese money market, however, has been generally calm, with our policy interest rate, the overnight call rate, remaining close to our target level.
The most significant factor that kept the Japanese money market stable was the limited exposure of Japanese financial institutions to subprime mortgage-related products. The stability could also be attributed to the ability of the Bank to accurately grasp financial market situations and perform money market operations, developed through a variety of past experiences including financial crisis.