ABSTRACT
A target zone as an alternative monetary system has been advocated by many economists and policy-makers.1 Advantages, shortcomings and feasibility of the target zone proposal have been examined in detail.2 It seems that the world is ready to conduct a target zone experiment. In fact, many participants in the foreign exchange markets believe that the monetary authorities of the G7 nations, especially Japan and the USA, have a reference range, or a target zone, in mind for their management of the exchange rate movement, although government officials have always denied the existence of a target zone.3 Denials by government officials do not necessarily mean that there has been no target zone. A (quiet) target zone could have been introduced without an announcement to the outside world. Was there a target zone?
