The Bank of Japan said Monday it will hold an extraordinary policy-setting meeting Tuesday to cope with economic ramifications of the war on Iraq.

It will constitute the first extraordinary Policy Board meeting since a new BOJ law took effect in April 1998. It will also be the first policy-setting meeting to be held under the leadership of new BOJ Gov. Toshihiko Fukui, who took over from Masaru Hayami last week.

During the meeting, the BOJ’s nine-member board is expected to discuss the validity of implementing additional monetary-easing measures, including increasing outright purchases of outstanding long-term Japanese government bonds from the current 1.2 trillion yen per month. The meeting will begin at 8 a.m.

It will be held amid a mounting clamor for further policy action by the BOJ ahead of the March 31 end of the current fiscal year.

Participants at the meeting will review Japan’s present severe financial and economic situation, including the potential impact of the ongoing war in Iraq, according to the BOJ.

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