IMF: Weak yen not problematic

31 May 2013

The International Monetary Fund (IMF) has said it does not see a weak yen as problematic if Japan implements some important reforms.

If the Bank of Japan brought in some monetary easing policies aimed at domestic goals, while simultaneously accompanying them with comprehensive fiscal and structural reforms, the IMF believes the weak yen will bear little bearing on the future of the economy.

The Bank of Japan is currently taking steps to contain excessive volatility in the government bonds market, according to the IMF, which gave a statement following an annual review of Japan's economic policies.

It also said that it fully endorses the Bank of Japan's monetary easing scheme introduced on April 4th and that the new monetary framework is beginning to work.

In its review, the IMF also said the central bank of Japan could still achieve its two per cent inflation target in the near to medium future if these fiscal and structural reforms are implemented.

By Gary Cooper

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