Central Banks
IMF Says BOJ Should Avoid Hasty Exit, Provide Rate Guidance
- IMF advises BOJ to keep current monetary policy framework
- Fund reiterates recommendations on long-term yield flexibility
The IMF said it expected inflation to peak in the first quarter of this year and fall below the BOJ’s 2% target by the end of 2024.
Photographer: Soichiro Koriyama/BloombergThis article is for subscribers only.
The International Monetary Fund said the Bank of Japan should avoid a premature exit from monetary easing and outline conditions for raising its negative interest rate in order to improve its communication.
“Any changes to monetary policy settings will need to be well communicated to facilitate smoother transitions and protect financial stability,” the fund said Friday at the conclusion of its latest Article IV consultation report on Japan. Abrupt policy framework change would impose risks on the economy, it said, as the central bank headed for its first governorship change in a decade.