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Last Updated: Tuesday, 20 January, 2004, 08:39 GMT
Bank of Japan tackles yen rise
Japanese investor
Japan's recovery is proceeding at a snail's pace
Japan's central bank has increased the amount of money in the economy to help the country's recovery and tackle the rising yen.

The Bank of Japan (BoJ) surprised financial markets with the move.

Japan's government has insisted it will do everything possible to prevent the falling dollar from harming exports.

Japanese interest rates are already effectively zero; instead the BoJ increased a key cash target for the first time since October 2003.

The BoJ eased monetary policy by increasing the target for the amount of cash it keeps on deposit overnight by a 3 trillion yen at the top end of the range.

The BoJ set a new target of between 30 trillion yen ($280bn) to 35 trillion yen ($326bn) from an upper limit of 32 trillion previously.

The yen weakened against the dollar after the BoJ's move.

The dollar was trading at 107.12 yen at 0800 GMT.

Japanese stocks have been rising since the start of the year as investors take a rosier view of the economy's prospects.

The Nikkei touched a three-month high on Tuesday, though it later dropped slightly to close at 11,103 points.

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