Market news
25.11.2019, 06:59

IMF: BOJ should target shorter maturity yields to ease banking-sector strain

  • BOJ should consider adjusting YCC framework, shift 0% target to shorter maturity from current 10-year bond yield.

  • BOJ could abandon quantity guidance on bond buying, should consider an inflation range target to increase policy flexibility.

  • Monetary, financial sector policies should be better coordinated to enhance monetary policy sustainability, mitigate financial stability risks.

  • Near-term fiscal policy should complement BOJ’s efforts to spur growth.

  • Japan's economic growth expected to moderate, inflation to edge up but remain below BOJ’s target.

  • Rising economic policy uncertainty, increase in financial stability risks suggest rising risk profile for Japan.

  • Japan's financial regulator should encourage regional banks to diversify businesses.

  • A more accommodative monetary stance by other major central banks could lead to yen rise, undermine BOJ’s reflation efforts.

  • Yen's 2019 real exchange rate is preliminary assessed as consistent with fundamentals.

  • Staff scenario suggests sales tax rate needs to rise to 15% by 2030, 20% by 2050 to finance ageing costs.

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