"There is uncertainty around the direction of monetary policy in Japan, amid a rise in inflation," Srinivasan said. While most Asian central banks must keep tightening monetary policy, Japan remains an exception with inflation still moderate - though this could change. "In addition, we see a risk that the global economy fragments into trading blocs," which could deal a particularly heavy blow to export-reliant Asia, Srinivasan said in a briefing at the Asian Development Bank's annual meeting in Incheon. "Over the medium term, we expect the Chinese economy to experience a slowdown in productivity and investment, which will lower growth below 4 percent by 2028," he said. Krishna Srinivasan, director of the IMF's Asia and Pacific Department, also pointed to risks surrounding Asia's economic outlook including from weakening exports to advanced economies, slowing productivity in China and a fragmentation of global trade. May 4 (Reuters) - The International Monetary Fund on Thursday warned of "uncertainty" around the direction of Japan's monetary policy, saying a possible shift from ultra-low interest rates could have a significant impact on global financial markets.
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