“The Bank of Japan’s revision of yield curve control settings is a logical step, including given worries about the functioning of the bond market, with uncertainties around the inflation outlook.”
Clearer communication on the prerequisites for changing the monetary policy framework would “help ground market expectations and increase the credibility of the Bank of Japan’s commitment to reaching its inflation objective,” according to the report.
In a statement issued on Wednesday, Ranil Salgado, the IMF’s mission chief in Japan, praised the Bank of Japan’s (BoJ) unexpected modification to the rates band as a prudent move.
