Title Managing the exit : lessons from Japan's reversal of unconventional monetary policy / prepared by Hiromi Yamaoka and Murtaza Syed

Published [Washington, D.C.] : International Monetary Fund, ©2010

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Description 1 online resource (14 pages) : illustrations (some color) Series IMF working paper ; WP/10/114 IMF working paper ; WP/10/114. Contents Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Rewriting the Rules: The BoJ's Unconventional Measures; III. The BoJ's Exit Strategy; A. Exit from Liquidity Operations and JGB Purchases; B. Exit from the Policy Duration Commitment: Raising Interest Rates; C. Exit from Unconventional Asset Purchases; D. Communication Strategy after the Exit: A New Monetary Framework; IV. How Successful Was Japan's Exit?; V. Potential Implications for the Current Exit; References; Footnotes Summary In responding to the global crisis, central banks in several advanced economies ventured beyond traditional monetary policy. A variety of unorthodox measures, including purchases of public and private assets, have significantly enlarged their balance sheets. As recoveries take hold, focus will increasingly shift from countering the Great Recession to orchestrating an exit and returning to a more normal monetary framework. Five years ago, as its economy recovered from a severe financial crisis, Japan attempted just such an exit. This note revisits the Bank of Japan's experience and draws potential lessons for managing an orderly exit today, with a focus on technical aspects, practicalities, and communication strategies. While the nature of the assets acquired during the present crisis could pose additional complications, parts of Japan's arsenal--communication, flexibility, a sufficient set of policy tools and a strategy for using them, safeguards against potential losses, the revival of risk appetite through decisive restructuring of balance sheets, and refinements to the monetary framework upon exit--also could be important this time around Bibliography Includes bibliographical references Subject Monetary policy -- Japan Economic development -- Japan Economic development Economic policy Monetary policy SUBJECT Japan -- Economic policy. http://id.loc.gov/authorities/subjects/sh85069409 Subject Japan Form Electronic book Author Syed, Murtaza, 1975- author. International Monetary Fund. Asia and Pacific Department, issuing body. ISBN 1283556375 9781283556378 9781455200733 1455200735 9781452727844 1452727848

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