The OECD on Wednesday raised its projections for Japan's economic growth thanks to a pickup in business and consumer sentiment brought on by the yen's slide and resulting jump in exports.
But the OECD also urged Japan to map out a credible fiscal rehabilitation plan soon, warning that the lack of such a plan will erode the credibility of government bonds and trigger a spike in long-term interest rates, which could weigh on the economy ahead.
The Paris-based club of 34 economically advanced nations said in its biannual report that the Japanese economy will expand 1.6 percent this year, upgraded from its November forecast of 0.7 percent in terms of inflation-adjusted gross domestic product growth.