IMF indicates further cut in reserve requirement may be needed; urges BOJ to reduce footprint in FX market

• The IMF has noted that further monetary easing is needed to restore inflation to the midpoint of the 4–6% target range.
• The BOJ’s recent reduction in the reserve requirement on Jamaican dollar deposits will support its more accommodative policy stance but further rate cuts are likely required, according to the IMF.
• The multilateral agency highlighted that in deciding further policy loosening, the BOJ should carefully assess all incoming data.
• Additionally, the IMF recommends that the BOJ should continue to reduce its FX market footprint, which includes limiting its FX sales in disorderly market conditions.

(Source: IMF)