We can only hope to smooth the peaks off the exchange rate and diminish investor perceptions that the New Zealand dollar is a oneway bet, rather than attempt to influence the trend level of the Kiwi. But we are prepared to scale up our foreign exchange activities if we see opportunities to have greater influence.
Under these circumstances, the virtuous cycle from profits to business fixed investment is likely to continue operating in the corporate sector. The Bank will closely monitor developments in domestic and overseas economies with a focus on these issues in preparing the Outlook for Economic Activity and Prices to be published next month. Price Developments Let me move on to price developments in Japan.