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30 May 2014
IMF urges Japan to boost reforms aimed at stimulating growth and competitiveness
FXStreet (Łódź) - The International Monetary Fund released a report on the state of the Japanese economy on Friday, in which it stressed that Tokyo should apply a more aggressive monetary policy in order to prevent the country from slipping back into deflation. Further structural reforms are needed to stimulate competitiveness and growth, the IMF suggested.
According to the report: "Over the medium term, transitioning to self-sustaining growth requires greater structural and fiscal reform efforts to avoid slipping back into deflation, overburdening monetary policy, and undermining confidence in the sustainability of government debt."
Following the release of the report IMF Deputy managing director David Lipton commented in an interview for Reuters that the yen was broadly in line with Japan fundamentals and that the composition and firmness of the third part (or "arrow") of PM Shinzo Abe's economic reform plan, to be unveiled in June, was crucial to improving competitiveness in the country.
"There's a need for Japan to strengthen its competitiveness. So we don't believe that strengthening of the yen at this point would be helpful because that would go in an opposite direction from that important need," Lipton stressed.
According to the report: "Over the medium term, transitioning to self-sustaining growth requires greater structural and fiscal reform efforts to avoid slipping back into deflation, overburdening monetary policy, and undermining confidence in the sustainability of government debt."
Following the release of the report IMF Deputy managing director David Lipton commented in an interview for Reuters that the yen was broadly in line with Japan fundamentals and that the composition and firmness of the third part (or "arrow") of PM Shinzo Abe's economic reform plan, to be unveiled in June, was crucial to improving competitiveness in the country.
"There's a need for Japan to strengthen its competitiveness. So we don't believe that strengthening of the yen at this point would be helpful because that would go in an opposite direction from that important need," Lipton stressed.