Horst Koehler, managing director of the International Monetary Fund, on Tuesday urged Japan to promote structural reforms to turn a fragile economic recovery into stronger, self-sustained growth.
"There are welcome signs that Japan may at last be emerging from recession," Koehler said in a speech at a symposium commemorating the 50th anniversary of Japan's entry into the IMF and the World Bank.
"But the consensus among forecasters is that the recovery will be modest, heavily dependent on external demand and, in particular, linked to economic developments in the United States," Koehler said. "Restoring a growth performance that corresponds to Japan's demonstrated potential demands nothing less than an integrated policy approach based on decisive restructuring of the banking and corporate sectors and macroeconomic policies designed to bring an end to deflation.