"This policy will boost growth in the short term."
-the International Monetary Fund
Japan's consumer confidence rose for a third consecutive month in March to the highest level in almost six years, according to data released by the Economic and Social Research Institute Wednesday. Consumer confidence improved to 44.8 from a revised 44.2 in the previous month, indicating that the aggressive actions of the nation's government and central bank are providing the desired impact. However, the result disappointed economists, who expected the confidence number to increase to 46.0.
Moreover, the IMF revised upward its forecast for Japan's economy for this year and 2014, saying that the latest fiscal stimulus will help to combat the long-lasting deflation in the country.
"After many years of deflation, and little or no growth, the new government has announced a new policy, based on aggressive quantitative easing, a positive inflation target, fiscal stimulus, and structural reforms," the IMF said. "This policy will boost growth in the short term."
"For (the BoJ) to be successful and achieve two percent inflation within two years, easing must be accompanied by ambitious growth and fiscal reforms to ensure a sustainable recovery and reduce fiscal risks."
© Dukascopy Bank SA