IMF article 4 policy proposal to Japan:

  • Japan's economic recovery is expected to strengthen in 2022 but balance of risks tilted to downside
  • Japan must maintain policy fiscal support to vulnerable households near-term, but continue to scale down pandemic-relief steps as recovery takes hold
  • looking ahead, Japan's fiscal policy should be 'nimble and flexible'
  • longer run, Japan must consider taking steps for fiscal consolidation such as raising consumption tax rate, hike taxes on property and capital income
  • BOJ must maintain accommodative monetary policy with inflation projected to remain below 2% target in medium term

Senior IMF official:

  • BOJ should continue current easy policy as inflation likely to move in 1% range over next few years
  • Japan likely to see inflation momentum build up this year as consumption rebounds
  • now is not time to shift yield target to shorter maturity, which becomes option if BOJ needs to ramp up stimulus
  • BOJ should consider further steps to make policy framework sustainable, such as targeting yield with shorter maturity than current 10-year yield

Nothing of much insight from the IMF here.


This is an 'Article 4' report on Japan. Here's how the IMF explain what that is:

  • When a country joins the IMF, it agrees to subject its economic and financial policies to the scrutiny of the international community. It also makes a commitment to pursue policies that are conducive to orderly economic growth and reasonable price stability, to avoid manipulating exchange rates for unfair competitive advantage, and to provide the IMF with data about its economy. The IMF's regular monitoring of economies and associated provision of policy advice is intended to identify weaknesses that are causing or could lead to financial or economic instability. This process is known as surveillance.
  • Country surveillance is an ongoing process that culminates in regular (usually annual) comprehensive consultations with individual member countries, with discussions in between as needed. The consultations are known as "Article IV consultations" because they are required by Article IV of the IMF's Articles of Agreement. During an Article IV consultation, an IMF team of economists visits a country to assess economic and financial developments and discuss the country's economic and financial policies with government and central bank officials. IMF staff missions also often meet with parliamentarians and representatives of business, labor unions, and civil society. The team reports its findings to IMF management and then presents them for discussion to the Executive Board, which represents all of the IMF's member countries. A summary of the Board's views is subsequently transmitted to the country's government. In this way, the views of the global community and the lessons of international experience are brought to bear on national policies.