OECD Urges Bank of Japan to Continue With Monetary Easing Stance

The Bank of Japan should continue its current monetary easing, given that inflation remains below the bank’s 2% target, the OECD says in a survey of the country’s economy.

• A weak recovery and temporary downward pressures on prices will likely keep inflation below target for some time
• Monetary policy accommodation shouldn’t be withdrawn prematurely
• OECD also urges Japan to increase the sales tax in small, regular increments in order to raise revenue
• NOTE: OECD also advised Japan to gradually increase the levy in its last survey of the country, published in 2019 around six months before the sales tax was ...