TOKYO (Reuters) - The Bank of Japan does not need to expand monetary policy in October even if it cuts its growth and price forecasts, as long as inflation expectations are well-anchored, the IMF’s mission chief for Japan said on Friday.
“So far the recovery in Japan this year has been frankly disappointing and bumpy,” Kalpana Kochhar, who is also deputy director of the International Monetary Fund’s Asia and Pacific Department, told Reuters in an interview.
She added that there was a good chance the IMF will cut Japan’s economic growth forecast for 2015 and 2016 in its next World Economic Outlook report.
On China’s yuan, she said there was scope to widen its trading band further to allow the currency to move more freely based on market forces.
“One benefit is that loosening the (yuan‘s) link to the dollar gives Chinese authorities some independence to conduct their own monetary policy,” she said.
Additional reporting by Takashi Umekawa; Editing by Chris Gallagher