IMF chief: upbeat on Japan's outlook
By Gregory Robb, CBS Marketwatch.com
WASHINGTON (CBS.MW) -- The chief of the International Monetary Fund delivered Tuesday an upbeat assessment on the Japanese economy after meeting in Tokyo with Prime Minister Junichiro Koizumi and senior Japanese government officials.
"I am optimistic about Japan's prospects, as both recent developments and my discussions indicate that Japan's longtime economic problems are easing," IMF managing director Rodrigo Rato said in a statement released at the conclusion of his visit.
Rato said the Japanese recovery has picked up pace and is broadening, while deflationary pressures are easing. The labor market is starting to improve as well.
"While there are risks to the outlook arising mainly from external factors, there is a good prospect that expansion will continue at a reasonably strong pace in the near term," he said.
Rato urged Japan to take further steps to improve its banking system and to stabilize public debt.
"My discussions with the authorities made clear their determination to take the necessary steps, not just by tackling remaining corporate and financial-sector weaknesses and deflation, but also by undertaking medium-term fiscal consolidation and wide-ranging structural reforms to boost Japan's economic potential," Rato said.
Analysts said optimism about the Japanese economy should support the yen. See full story.
Rato said he would work with Japanese officials "on how Asia's voice can be better heard in the IMF."
The IMF chief, a former Spanish finance minister, will also visit China, Singapore and Vietnam in his first trip since becoming managing director earlier this month.
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