A top International Monetary Fund official urged Japan on Wednesday to adopt a medium-term inflation target to help the country break out of a crippling deflationary trap.
The step was among a list of recommendations for fixing Japan's economy presented by First Deputy Managing Director Anne Krueger, the IMF's No. 2 official. The list, presented at a news conference in Tokyo, also includes calls for financial-sector reforms, corporate restructuring and fiscal consolidation.
"Strengthened efforts to end deflation are required," Krueger said. "A medium-term inflation target combined with clear communication of the strengthened strategy would help convince the public that deflation will end, and encourage spending."