The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
Macroeconomic policy support and structural reforms have helped to bring about the economic recovery in Japan. Initiating a public process to obtain consensus on a credible strategy for eventual fiscal consolidation would help to raise confidence in long-term growth prospects and reduce the risks of volatile financial market conditions. A premature appreciation of the yen not justified by improving fundamentals remains a concern. Important progress has been made in strengthening major banks balance sheets and allaying concerns about financial instability.