IMF urges BOJ to consider targeting shorter-term yields

“The Bank of Japan (BOJ) should consider further steps to make its ultra-easy monetary policy more sustainable, such as steepening the yield curve by targeting a shorter maturity than the current 10-year yield,” said an executive from the International Monetary Fund (IMF), per Reuters.

Odd Per Brekk, Deputy Director of the IMF's Asia and Pacific Department, crossed wires via Reuters during early Friday in Asia as the executive said, “The BOJ must clearly communicate that the move would be aimed at enhancing the effect of its ultra-easy policy, not at withdrawing stimulus.”

Key quotes

It's worth noting taht IMF Japan Chief Ranil Salgado also spoke after IMF's Brekk while saying, "If markets become volatile due to fed tightening cycle, that could have the other impact on yen due to its safe-haven status," per Reuters.

Additional comments from IMF's Salgado

Fed tightening cycle could widen interest rate differentials between u.s. and japan, which could put downward pressure on yen.

China slowdown can be a downside risk through trade.

USD/JPY picks up bids

Following the news, USD/JPY remains firmer around a two-week high flashed the previous day, refreshing intraday high to 115.43 as Tokyo opens for Friday.