IMF's Gopinath urges BOJ to go slow in raising interest rates By Reuters investing.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from investing.com Daily Mail and Mail on Sunday newspapers.
TOKYO (Reuters) -The Bank of Japan can avoid upending global markets with its policy shift by moving gradually when raising interest rates and providing clear communication along the way, International Monetary Fund First Deputy Managing Director Gita Gopinath said on Friday. Japan's output gap will stay closed into next year and this year's annual wage negotiations will produce wage growth higher than last year, allowing the central bank to end its yield curve control (YCC) and massive asset-buying programme, she said. Ending its negative interest rate policy in place since 2016, a move markets expect could happen by April, will also likely be smooth as there is a clear recognition by investors that inflation-adjusted real borrowing costs will remain very low, Gopinath said.
Japan s output gap will stay closed into next year and this year s annual wage negotiations will produce wage growth higher than last year, allowing the central bank to end its yield curve control (YCC) and massive asset-buying programme, she said.
Speaking at a session during the World Economic Forum Annual Meeting 2024 here, Gopinath dismissed the market bets for a cut in interest rates as premature.