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Bearish Extension

--IMF WEO Keeps Japan 2020 GDP Forecast At 0.5%
--IMF: Sustained monetary accommodation necessary 
     TOKYO (MNI) - The International Monetary Fund has lowered its forecast for
Japanese economic growth in 2019 to 1.0% from 1.1% in January, but kept its 2020
GDP forecast at 0.5%, the latest IMF's World Economic Outlook showed Tuesday
morning in Washington.
     But the projected 1.0% growth in 2019 was higher than +0.9% made in
     The WEO said, "Japan's economy is set to grow by 1.0% in 2019 (0.1
percentage point higher than in the October WEO). This revision mainly reflects
additional fiscal support this year, including measures to mitigate the effects
of the planned consumption tax rate increase (to 10% from 8%) in October 2019."
     It also said, "Growth is projected to moderate to 0.5% in 2020 (0.2
percentage point higher than in the October 2018 WEO, reflecting the effects of
the aforementioned mitigating measures)."
     Here are the key points from the portion of the IMF's April WEO related to
     --The IMF said, "Monetary policy should stay accommodative in these
(advanced) economies until inflation starts showing clear signs of rising toward
central banks' targets. With monetary policy trained on countercyclical demand
management, fiscal policy should emphasize measures that boost potential output
and raise inclusiveness, while maintaining public finances on a sustainable
     --"In Japan, sustained monetary accommodation will be necessary to lift
inflation expectations and progress toward the central bank's target. Fiscal
policy should be geared toward ensuring long-term fiscal sustainability while
protecting growth. The coupling of the planned October increase in the
consumption tax rate with fiscal measures to support near-term activity is
     --"Inflation is projected to remain broadly at current levels for the
advanced economy group." "Japan's core inflation rate (excluding fresh food and
energy) is projected to rise to 1.4% by the end of 2020 as the consumption tax
rate is raised in October this year, softening back to about 1.3% in the medium
     --"A sustainable debt trajectory calls for further gradual and steady
increases in the consumption tax rate and reforms of the social security
framework. The success of the broad Abenomics agenda of reflating the economy
depends crucially on also lifting productivity growth and wage inflation, for
which reducing labor market duality to increase productivity of nonregular
workers remains vital."
     --"Durably counteracting the aging-induced decline in labor force growth
will require, among other initiatives, further raising female labor force supply
and encouraging more use of foreign labor."
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI Washington Bureau; tel: +1 202-371-2121; email: