Ella 
Japan’s commitment to allowing the yen (JPY) to move flexibly will allow the Bank of Japan (BoJ) to focus on achieving price stability, the International Monetary Fund (IMF) said on Tuesday, while warning against calls by some experts to use monetary policy to limit currency depreciation. .
Main quotes:
Further increases in Japan’s short-term policy interest rates should be gradual and data-dependent.
Emphasizing Japan’s long-term commitment to a flexible exchange rate system will help absorb shocks and support monetary policy’s emphasis on price stability.
The Bank of Japan’s purchases of Japanese government bonds at the national level will help mitigate excessive volatility in bond yields that could undermine financial stability during policy transitions.
It will be key for the Bank of Japan to adopt a clear and effective communication strategy to continue to emphasize the factors behind the pace of interest rate hikes.
