Investors will lose confidence in Japan’s economic revival unless Prime Minister Shinzo Abe adds substance to his growth strategy and relies less on stimulus measures, said a former senior central bank official.
It would be “dangerous” for the Bank of Japan to increase stimulus beyond what it already planned before Prime Minister Shinzo Abe implements structural reforms in the economy, a top International Monetary Fund official said.
Japanese Finance Minister Taro Aso said it was up to the U.S. to resolve its debt impasse, not for Japan to fret over its investment in Treasuries, as a deadlock in Washington threatens to trigger a U.S. default.
The Bank of Japan may need to provide more monetary stimulus if power shortages, supply chain disruptions and the nuclear crisis after the quake are prolonged, the International Monetary Fund’s No. 3 official said.
Greece’s deepening financial crisis serves as a lesson for Japan, which needs to devise a “credible” fiscal plan to curtail the world’s largest public debt, an International Monetary Fund official said.
The International Monetary Fund is discussing the criteria for adding currencies to its Special Drawing Rights valuation basket made up of the dollar, euro, yen and pound, its number-three official said.
Europe has yet to allay investor “skepticism” about the sustainability of the region’s debt, and any spread of the crisis would cloud the global economic outlook, the International Monetary Fund’s No. 3 official said.
The yen declined against most of its 16 major peers amid speculation the People’s Bank of China will act to support growth in the world’s second-biggest economy, sapping the allure of the relative safety of Japan’s currency.