13 February 2001, 18:19 BoJ Feb economic assessment -- 2 (prices to remain weak)
The BoJ said overall prices will be somewhat weak for the time
being due to a fall in consumer goods prices, the streamlining of
distribution channels, reduced communications charges on deregulation,
and falling crude oil prices.
Despite the upward pressure on prices from the recent fall in the
yen, the balance between supply and demand in the domestic market is
projected to be on a gradual improving trend due to the expected
moderate economic recovery, it said.
Overall inventories remain at a low level, even though those of
some materials and electrical parts have become somewhat excessive due
to demand from overseas declining significantly, the bank said.
The overnight call rate is generally moving around 0.25 pct, while
yields on long-term government bonds have declined to around 1.40-1.45
pct, with yield spreads between corporate and government bonds mostly
unchanged or expanding only somewhat.
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