Finance Minister Sadakazu Tanigaki expressed confidence Saturday that economic recovery in Japan led by domestic demand will continue, and he vowed to accelerate structural reforms and ensure an early end to deflation.
"The impact of the improved profit situation in the corporate sector has increased business investments and has permeated the household sector through better labor market conditions and buoyant private consumption," Tanigaki said at a meeting of the International Monetary Fund's policy-guiding panel.
"The economic recovery led by domestic private demand is expected to continue," he said.
Tanigaki said Japan will accelerate structural reform efforts, including the quick disposal of bad loans at major banks and the privatization of the postal services, to attain sustainable economic growth.
He said the government and the Bank of Japan will continue to work together to overcome deflation by the end of fiscal 2006.
"While persistent deflation pressure has eased, overcoming deflation remains high on the policy agenda," he said.
Tanigaki welcomed the rapid recovery of the global economy but called for continued vigilance against the effects of soaring oil prices, inflationary pressure and the pace of rising interest rates.