IMF Deputy Director Highlights BOJ Policy Space
Dan Katz, the International Monetary Fund’s first deputy managing director, told Bloomberg Television from Cape Town that the Bank of Japan (BOJ) has room to continue normalising its monetary policy as Japan undergoes an economic transformation. He noted that structural reforms introduced under former Prime Minister Shinzo Abe are now beginning to show results after years of implementation.
Shift from Ultra‑Low Rates
Katz explained that the BOJ has started to move out of the very low interest‑rate regime that persisted for almost three decades, signalling a move toward policy normalisation. He added that inflation remains modestly above the BOJ’s target, so a continued normalisation path is expected.
Inflation and Growth Mandate
According to Katz, the central bank is expected to take the necessary steps to meet its inflation mandate while simultaneously supporting economic growth.
US‑Japan Joint Yen Intervention
The article reports that the United States and Japan carried out their first joint intervention in the Japanese yen in 15 years. U.S. Treasury Secretary Scott Bessent warned traders that Washington would take further action if needed.
Treasury Secretary’s Comment on Undervaluation
On August 4, Bessent posted on X that the intervention represents only part of the solution to address what he described as the yen’s substantial undervaluation.
Publication Note
The piece was generated with AI assistance and reviewed by an editor, with the source credited to Reuters.