The second-highest-ranking official at the International Monetary Fund (IMF) stated that Japan's economic recovery is creating favorable conditions for the Bank of Japan (BOJ) to continue its policy normalization process after decades of ultra-loose monetary policy.
Gita Gopinath, the IMF's First Deputy Managing Director, noted that Japan is undergoing a "profound long-term transformation," with structural reforms initiated by former Prime Minister Shinzo Abe now beginning to show tangible results. Speaking in an interview in Cape Town on Thursday, she remarked: "The Bank of Japan has started to move away from the near-zero interest rate environment that has persisted for almost 30 years, advancing its monetary policy normalization."
Gopinath, who served as chief of staff at the U.S. Treasury Department before joining the IMF last year, said she expects "the Bank of Japan to take all necessary steps to fulfill its mandate, which includes achieving its inflation target while also supporting economic growth."
When asked what additional measures the BOJ might need to take to support the yen, Gopinath responded: "Inflation is still slightly above the target level, so I anticipate that normalization will continue to move forward."
Comments