IMF welcomes BOJ new
policy framework, sees 2 percent inflation elusive
Send a link to a friend
[September 26, 2016]
By Tetsushi Kajimoto and Stanley White
TOKYO
(Reuters) - The International Monetary Fund said on Monday that a new
monetary policy framework adopted by the Bank of Japan marked
"progress", but stuck to its view that the central bank won't be able to
hit its ambitious 2 percent inflation goal anytime soon.
IMF Japan mission chief Luc Everaert made the remarks after the BOJ last
week switched to targeting short- and long-term interest rates, and
dropped its previous target of increasing base money at an annual pace
of 80 trillion yen ($792 billion).
"We think that what happened on Sept. 21 is a good thing and welcomed
that very much," Everaert told a seminar in Tokyo, referring to the
BOJ's decision, which he said has removed a strict time horizon of
achieving the inflation target.
"This new framework is a progress but that does not mean that the
inflation target is going to be achieved much sooner than it otherwise
would have," he added.
![](http://archives.lincolndailynews.com/2016/Sep/26/images/ads/current/graue_sda_june2015.png)
With Japan struggling to break free of a long, debilitating phase of
deflation despite the ultra-easy monetary policy adopted in April 2013,
many economists have said that 2 percent inflation was an overly
ambitious goal.
A senior BOJ official said the central bank's new monetary policy
framework should not be taken as a message that the BOJ feels it is done
with easing, as it is aimed at strengthening the BOJ's commitment to
meeting its 2 percent inflation target.
"Our policy framework is more sustainable, but it doesn't mean it will
take longer to achieve 2 percent inflation," Tomoyuki Shimoda, deputy
director-general at the BOJ's Monetary Affairs Department, told the
seminar.
[to top of second column] |
![](../images/092616pics/busine19.jpg)
A Japanese flag flutters atop the Bank of Japan building in Tokyo,
Japan, September 21, 2016. REUTERS/Toru Hanai
![](../images/ads/current/demay_inv-lda081412.png)
"There
is no change to our strong commitment to achieve 2 percent inflation at the
earliest possible time," he added, echoing Governor Haruhiko Kuroda's resolve to
hit the price goal quickly.
Everaert urged the BOJ to continue to clarify its policy guidance and to
strengthen its communication while being careful to preserve stability in the
Japanese government bond market.
Many market players think the BOJ will eventually need to taper its bond buying
to keep bond yields around its new target.
Kuroda said on Monday that the pace of its government bond buying may fluctuate
under its new yield curve control, but said the fluctuations would not carry
policy implications.
(Reporting by Tetsushi Kajimoto and Stanley White; Editing by Simon
Cameron-Moore)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
![](http://archives.lincolndailynews.com/2016/Aug/26/images/ads/current/best_friends_sda_120215.png)
![](http://archives.lincolndailynews.com/2016/Aug/26/images/ads/current/ldn_medical_directory_small_2016.png) |