IMF calls on Japan to maintain accommodative policy

IMF calls on Japan to maintain accommodative policy
Bank of Japan maintained interest rates at -0.1%

Mubasher: The International Monetary Fund (IMF) has urged Japan to maintain its massive monetary stimulus to boost consumer prices, as reported by Reuters on Wednesday.

This is reinforcing expectations that Japan’ accommodative policy will continue.

The Bank of Japan has kept interest rates at -0.1%, and the 10-year government bond yield around 0%.

IMF managing director Christine Lagarde said Bank of Japan Governor Haruhiko Kuroda was doing the right thing by committing to keep the money spigot wide open until inflation hit his 2% target.

“One of the strengths of central bankers is to be very clear in their communication and determined in their resolve, which clearly Governor Kuroda has demonstrated,” Lagarde told Reuters on Wednesday, as quoted by the news agency.

The diverging policy paths of major central banks had not led to massive and disruptive capital outflows in Asia, because of the cautious approach and clear communication by central bankers on their policy shifts, she added.

“We believe these conditions can help to ensure that monetary policy changes do not provoke unnecessary capital flow movements,” Lagarde noted.

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Source: Mubasher

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