IMF: Japan needs to continue accommodative monetary policy

The International Monetary Fund (IMF) is out with their latest assessment of the Japanese economy, with the key highlights found below.

Japan needs to continue the accommodative monetary policy.

Monetary policy also needs clear forward guidance.

Clear forward guidance and improved framework would lift inflation expectations.

Near-term fiscal tightening should be avoided.

2018 real exchange rate is broadly consistent with medium-term fundamentals.

Abenomics remains appropriate, but reinvigorated policies are needed.

Japan's underlying growth is to remain solid, notwithstanding planned sales tax hike.

Calls for gradual sales tax hike at least to 15%.

Says BOJ should maintain long-term interest rate target.

Says BOJ could remove guidance on amount of JGB purchases.

Downside risks to Japan have increased.

Weaker global demand and uncertainty on trade could undermine growth.