The Bank of Japan should consider boosting flexibility in long-term yields as rising inflation risks call for securing more room for policy maneuvering, according to the International Monetary Fund.
Options include raising its 10-year yield target, widening the yield trading band, switching back to a quantity goal for bond buying and aiming at a shorter-maturity yield, the fund said in an Article IV report published Thursday.
The fund made the recommendations amid "exceptionally high uncertainty” around inflation with risks tilted to the upside.