Many Bank of Japan Policy Board members said a surge in international commodity prices was not yet affecting consumer prices in Japan but the effect on domestic prices and corporate profits required close monitoring, minutes from a policy-setting meeting showed on Wednesday. On currencies, some members at the March 15-16 meeting said the market had reduced expectations of a further fall in the dollar but one member said market developments needed to be watched because there were views that the yen would appreciate in the longer term.
One member also voiced concern about the impact on the money market of an increase in issues of financing bills by the government, which are used to finance currency interventions. The nine-member Board decided unanimously at both that meeting and an earlier one on February 26 to keep the central bank's monetary easing stance unchanged, with the liquidity target at 30-35 trillion yen ($281-328 billion). The Policy Board also left monetary policy unchanged at its latest meeting which ended last Friday. The BOJ later raised its assessment of the economy, saying domestic demand was becoming firmer after the March "tankan" survey of corporate sentiment showed companies were more confident than at any time in seven years. ($1=106.79 Yen)///