The International Monetary Fund on Friday urged the Bank of Japan to end its yield cap program and other unprecedented monetary easing steps while gradually raising interest rates as a result of the country's improving inflation outlook.
In normalizing monetary policy, the BOJ should take a "gradual and well-communicated" approach to anchor market expectations of the shift after a decade of powerful monetary easing that was designed to attain its goal of stable inflation at 2%, the IMF said.
"Unconventional monetary policies have done their job of supporting a recovery and raising inflation expectations but are no longer needed to achieve the inflation target," IMF first deputy managing director Gita Gopinath told a press briefing.