The Bank of Japan’s massive stimulus is working, the International Monetary Fund’s mission chief to Japan said, and there is still room to increase purchases of government bonds and exchange-traded funds if a further boost was needed.
Jerry Schiff, who is also deputy director of the IMF’s Asia-Pacific Department, stressed he saw no need for the central bank to offer additional stimulus for now with the world’s third-largest economy in good shape.
“There’s no need for the BOJ to change what they’re doing,” Schiff said. “There’s a rise in actual inflation and a rise in inflation expectations. Neither are very dramatic yet, but are certainly in the right direction,” he told Reuters on Tuesday.
While market volatility and capital outflows have hurt emerging Asian economies, he said some signs in the region suggest Japan will get more support from exports next year.
Indeed, Anoop Singh, the IMF’s top official for Asia, told a seminar in Tokyo that Prime Minister Shinzo Abe’s aggressive stimulus, dubbed “Abenomics”, had helped counter the outflows from the region triggered by expectations of a tapering of the U.S. Federal Reserve’s asset-buying program.
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