IMF urges Japan to be more flexible in setting long-term bond yields
The International Monetary Fund on Thursday called for “more flexibility” in Japanese long-term yields after the Bank of Japan jolted financial markets with its surprise decision to widen the trading band last month for 10-year government bonds.
Accommodative monetary policy is still appropriate, and “exceptionally high uncertainty” remains over the inflation outlook, IMF staff said. Still, upside risks to inflation are prominent, partly because of the delayed impact of a weaker yen, second-round waves of imported inflation and border reopening, they added.
“The policy challenge in the near te...