IMF’s Salgado: See prospect, potential of more flexibility at long end of curve under BoJ’s YCC policy

Dhwani Mehta FXStreet

International Monetary Fund (IMF) Japan Mission Chief Ranil Salgado said on Friday, “we do see a prospect and the potential of more flexibility a the long end of the curve under the Bank of Japan’s (BOJ) YCC policy.”

Additional quotes

“There are two-sided risks to Japan's inflation, including upward surprises in the Shunto wage negotiations.”

“Downside risks to Japan's inflation outlook are related to the global environment, financial shocks that raise prospects of a global recession.”

“Our advice to the BoJ is to consider allowing for greater flexibility at longer-end yields, allow lthe longer end of the curve to be more determined by market forces.”

Market reaction

As of writing, USD/JPY is consolidating gains above 133.00. having tested the 133.50 level in early trades. The pair ignored the upbeat Japanese data amid the country’s Fiscal Year-related flows. The pair is adding 0.35% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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