IMF says BOJ should maintain massive stimulus

TOKYO (Reuters) - The Bank of Japan should maintain its massive monetary stimulus and enhance its communication of how it expects to achieve its 2 percent inflation target, a senior IMF official said on Friday.

Odd Per Brekk, the International Monetary Fund's mission chief for Japan, said the BOJ will likely lag behind the U.S. Federal Reserve and the European Central Bank in normalising monetary policy.

"But we think this is appropriate, as monetary policy is focused on domestic conditions and domestic conditions are different among countries and regions," he said in a seminar.

He also said a gradual, steady increase in the sales tax, coupled with steps to curb social security spending, is the most growth-friendly way to achieve medium-term fiscal reform.

(Reporting by Leika Kihara; Editing by Chris Gallagher)

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