Abstract
This 2013 Article IV Consultation highlights that on the back of new policy framework, growth in Japan accelerated sharply in early 2013. First quarter GDP growth rose to 4.1 percent (seasonally adjusted annual rate) after two quarters of stagnation. Rising equity values stimulated consumption, and exports rebounded supported by strong regional demand and a weaker yen. Inflation expectations have started to increase, and actual inflation recorded positive growth in June. The near-term outlook has improved considerably, buoyed by stimulus. In 2014, growth is expected to moderate to 1.2 percent.
Fund Relations
(As of June 30, 2013)
Membership Status: Joined August 13, 1952; Article VIII
General Resources Account:
| SDR Million | % Quota | ||
|---|---|---|---|
| Quota | 15,628.50 | 100.00 | |
| Fund holdings of currency | 15,100.35 | 96.62 | |
| Reserve Tranche Position | 528.51 | 3.38 | |
| Lending to the Fund | |||
| New Arrangements to Borrow | 8,458.28 | ||
| SDR Million | % Quota | ||
|---|---|---|---|
| Quota | 15,628.50 | 100.00 | |
| Fund holdings of currency | 15,100.35 | 96.62 | |
| Reserve Tranche Position | 528.51 | 3.38 | |
| Lending to the Fund | |||
| New Arrangements to Borrow | 8,458.28 | ||
SDR Department:
| SDR Million | %Allocation | |
|---|---|---|
| Net cumulative allocation | 12,284.97 | 100.00 |
| Holdings | 12,958.00 | 105.48 |
| SDR Million | %Allocation | |
|---|---|---|
| Net cumulative allocation | 12,284.97 | 100.00 |
| Holdings | 12,958.00 | 105.48 |
Outstanding Purchases and Loans: None
Latest Financial Arrangements: None
Projected Obligations to Fund:1
(SDR Million; Based on Existing Use of Resources and Present Holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.07 | 0.07 | 0.07 | 0.07 | |
| Total | 0.07 | 0.07 | 0.07 | 0.07 | |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.07 | 0.07 | 0.07 | 0.07 | |
| Total | 0.07 | 0.07 | 0.07 | 0.07 | |
Exchange Rate Arrangement:
Japan maintains a free floating exchange rate regime. Since the 2012 Article IV consultation, Japan has not had foreign exchange intervention. The ministry of finance publishes foreign exchange intervention information on its website. The exchange system is free of restrictions on the making of payments and transfers for current international transactions, with the exceptions of restrictions imposed solely for the preservation of national or international security that have been notified to the Fund pursuant to Executive Board Decision No. 144–(52/51).
Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Framework:
Japan underwent an assessment of its AML/CFT framework against the AML/CFT standard by the Financial Action Task Force (FATF) and the Asia/Pacific Group (APG) in 2008. Significant deficiencies were identified, notably with respect to customer due diligence (CDD) requirements, transparency of legal entities, the criminalization of terrorist financing and the freezing of terrorist assets. Since then, Japan has taken important steps to remedy some of the shortcomings identified. According to Japan’s May 2013 follow-up report to the FATF (page 3), further action is nevertheless required, notably with a view to strengthening CDD rules and enabling appropriate freezing of terrorist assets. In addition, further improvements seem necessary to increase the transparency (and thus limit the misuse) of legal entities. No dates have been set for Japan’s next mutual evaluation.
Article IV Consultation:
The 2012 Article IV consultation discussions were held during May 30–June 12, 2012; the Executive Board discussed the Staff Report (IMF Country Report No. 12/208 and concluded the consultation on July 10, 2012. The concluding statement, staff report, staff supplement, selected issues paper, and PIN were all published.
Statistical Issues
Economic and financial data provided to the Fund are considered adequate for surveillance purposes. Japan subscribes to the Special Data Dissemination Standard (SDDS) and meets the SDDS specifications for the coverage, periodicity, and timeliness of data. The Japanese authorities hosted a data module mission for a Report on the Observance of Standards and Codes (data ROSC) in September 12–28, 2005. The Report on Observance of Standards and Codes - Data Module, Response by the Authorities, and Detailed Assessments Using the Data Quality Assessment Framework (DQAF) were published March 17, 2006 and are available at http://www.imf.org/external/pubs/ft/scr/2006/cr06115.pdf.
Japan: Table of Common Indicators Required for Surveillance (as of June 13, 2013)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC or the Substantive Update (published on May 17, 2006, and based on the findings of the mission that took place during September 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning (respectively) source data and its assessment, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.
Japan: Table of Common Indicators Required for Surveillance (as of June 13, 2013)
| Date of Latest Observation |
Date Received |
Frequency of Data6 |
Frequency of Reporting6 |
Frequency of Publication6 |
Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality – Methodological soundness7 |
Data Quality – Accuracy and reliability8 |
||||||
| Exchange Rates | June 2013 | June 2013 | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 6/10/2013 | 6/12/2013 | Every 10 days | Every 10 days | Every 10 days | ||
| Reserve/Base Money | May 2013 | June 2013 | M | M | M | LO, LO, LO, LO | O, O, O, O, O |
| Broad Money | May 2013 | June 2013 | M | M | M | ||
| International Investment Position | 2013 Q1 | June 2013 | Q | Q | Q | ||
| Central Bank Balance Sheet | 6/10/2013 | 6/12/2013 | Every 10 days | Every 10 days | Every 10 days | ||
| Consolidated Balance Sheet of the Banking System | April 2013 | June 2013 | M | M | M | ||
| Interest Rates2 | June 2013 | June 2013 | D | D | D | ||
| Consumer Price Index | April 2013 | May 2013 | M | M | M | O, LO, O, O | O, O, LO, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 2011 | January 2013 | A | A | A | O, LNO, O, O | LO, O, O, O, LO |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | 2011 | January 2013 | A | A | A | ||
| Stocks of Central Government and Central Government-Guaranteed Debt5 | March 2013 | May 2013 | Q | Q | Q | ||
| External Current Account Balance | April 2013 | June 2013 | M | M | M | O, O, LO, O | LO, O, O, O, O |
| Exports and Imports of Goods and Services | April 2013 | June 2013 | M | M | M | ||
| GDP/GNP | 2013 Q1 | June 2013 | Q | Q | Q | O, O, O, O, | LO, LO, O, O, LNO |
| Gross External Debt | Mar 2013 | June 2013 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC or the Substantive Update (published on May 17, 2006, and based on the findings of the mission that took place during September 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning (respectively) source data and its assessment, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.
Japan: Table of Common Indicators Required for Surveillance (as of June 13, 2013)
| Date of Latest Observation |
Date Received |
Frequency of Data6 |
Frequency of Reporting6 |
Frequency of Publication6 |
Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality – Methodological soundness7 |
Data Quality – Accuracy and reliability8 |
||||||
| Exchange Rates | June 2013 | June 2013 | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 6/10/2013 | 6/12/2013 | Every 10 days | Every 10 days | Every 10 days | ||
| Reserve/Base Money | May 2013 | June 2013 | M | M | M | LO, LO, LO, LO | O, O, O, O, O |
| Broad Money | May 2013 | June 2013 | M | M | M | ||
| International Investment Position | 2013 Q1 | June 2013 | Q | Q | Q | ||
| Central Bank Balance Sheet | 6/10/2013 | 6/12/2013 | Every 10 days | Every 10 days | Every 10 days | ||
| Consolidated Balance Sheet of the Banking System | April 2013 | June 2013 | M | M | M | ||
| Interest Rates2 | June 2013 | June 2013 | D | D | D | ||
| Consumer Price Index | April 2013 | May 2013 | M | M | M | O, LO, O, O | O, O, LO, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 2011 | January 2013 | A | A | A | O, LNO, O, O | LO, O, O, O, LO |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | 2011 | January 2013 | A | A | A | ||
| Stocks of Central Government and Central Government-Guaranteed Debt5 | March 2013 | May 2013 | Q | Q | Q | ||
| External Current Account Balance | April 2013 | June 2013 | M | M | M | O, O, LO, O | LO, O, O, O, O |
| Exports and Imports of Goods and Services | April 2013 | June 2013 | M | M | M | ||
| GDP/GNP | 2013 Q1 | June 2013 | Q | Q | Q | O, O, O, O, | LO, LO, O, O, LNO |
| Gross External Debt | Mar 2013 | June 2013 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC or the Substantive Update (published on May 17, 2006, and based on the findings of the mission that took place during September 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning (respectively) source data and its assessment, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.