IMF statement:

  • No need for further BOJ easing now, but should act quickly if inflation stagnates or growth disappoints
  • Japan economy weathering impact of sales tax hike, expected to resume recovery in 2nd half of this year
  • Expect BOJ’s 2% inflation target to be achieved by 2017, later than envisaged by BOJ
  • Near-term risks to Japan economy are balanced but sustainability of recovery at risk on soft China growth, geopolitical tensions
  • More forceful structural reforms needed to tackle growth impediments to Japan’s economy
  • Cutting corporate tax rate has economic benefits but must be accompanied by compensating expenditure, revenue steps
  • Providing more information about asset purchases beyond 2014 would enhance BOJ’s policy transparency
  • Yen is broadly in balance assuming all 3 arrows of ‘Abenomics’ are launched successfully
  • Launching all 3 arrows of ‘Abenomics’ will create positive spillovers to Asian, global economies

Big assumption underlined in there …

Headlines via Reuters