Japan's Long-Term Yields Should Be More Flexible: IMF

Tokyo, Jan. 26 (Jiji Press)--The International Monetary Fund recommended on Thursday that the Bank of Japan allow more flexibility for long-term interest rates it controls as part of its massive monetary easing policy.

"To better manage risks given increased uncertainty regarding inflation, more flexibility in longer-term yields should be considered," the IMF said in a statement following its annual review of the country's economy.

The statement also expressed concern about the extent to which Japanese fiscal expenditures are expanding due to COVID-19 measures and other policies.

The IMF said that "an overall accommodative monetary policy stance remains appropriate," but added that the BOJ's massive buying of Japanese government bonds has distorted the JGB yield curve.

"More flexibility in long-term yields would help to avoid abrupt changes later," it argued.

[Copyright The Jiji Press, Ltd.]