Based on this thinking, the Bank of Japan will continue to carefully monitor foreign exchange rate developments and their effects on the Japanese economy. B. Monetary Policy Management In the management of current monetary policy, the Bank of Japan will continue to monitor economic developments closely, placing emphasis on further strengthening the foundation of an economic recovery.
In April 1997, the consumption tax rate will be raised from 3 percent to 5 percent. Therefore, I would also like to discuss how the Bank of Japan views the possible effects of this tax rate rise on prices, in the context of managing monetary policy.