The International Monetary Fund on Friday endorsed
the aggressive monetary easing measures taken by the Bank of Japan in
"The economic recovery is gaining traction, driven in large part by the adoption of the new Quantitative and Qualitative Monetary Easing (QQME) framework," the IMF said.
"The new policies have gotten off to a promising start. Growth in the first quarter of 2013 rebounded strongly, led by consumption and net exports."
Japan's economy grew 3.5 per cent year-on-year in the January-to-March quarter, beating estimates.
The Washington-based IMF predicted that the world's third-largest economy would expand 1.6 per cent in 2013.
Japan has been plagued by the deflation that has lasted more than a decade. Bank of Japan Governor Haruhiko Kuroda, who took office in March, vowed to take aggressive monetary easing steps to achieve a target of 2-per-cent inflation.
"Complementary growth strategies and fiscal reforms are, however, essential to raise inflation in a durable manner. If these are successfully implemented, the mission estimates that the 2 per cent inflation target could be achieved in the near to medium-term," the IMF said.
However, the government said Friday that the nation's consumer prices fell 0.4 per cent in April from a year earlier for the sixth consecutive month of year-on-year falls.
Meanwhile, the IMF said it did not consider the recent depreciation of the Japanese yen to be problematic "so long as monetary easing pursues domestic goals, and is accompanied by comprehensive fiscal and structural reforms."
The yen has fallen 25 per cent against the US dollar since November. The depreciation of the currency makes Japanese goods more competitive overseas and improves repatriated revenues.
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