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mpc: 3 The biggest exchange rate movements during the month had been associated with the yen, which had appreciated by 3½% in effective terms, probably because market participants were anticipating reduced foreign exchange intervention by the Bank of Japan. The US dollar effective exchange rate was around 2% weaker on the month, largely reflecting the movement of the US dollar against the yen. The effective exchange rate for sterling was slightly higher on the month, with depreciation against the yen offset by modest appreciation against the euro and US dollar. This left the sterling effective exchange rate index some 3% above the fifteen-day average level taken as the starting point for the exchange rate projections in the February Inflation Report.