TOKYO/WASHINGTON – The Bank of Japan should start preparing for future monetary tightening by moving away from its yield control policy, the International Monetary Fund’s chief economist Pierre-Olivier Gourinchas said on Tuesday.
The remarks came ahead of the BOJ’s closely watched meeting on Friday, where the board will release fresh price forecasts and debate whether to tweak its controversial yield curve control (YCC) policy as inflation stays above its 2% target.
“Right now, the risk is probably on the upside, that maybe inflation pressures will continue to remain above the target,” Gourinchas said on Japan’s inflation outlook.
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