"Given that the fiscal deficit is running high and the government debt outstanding has already reached extremely high levels, it is quite important for the government to show a clear path toward fiscal consolidation and implement it"
- Haruhiko Kuroda, BoJ Governor
A lack of fundamental data from Japan? BoJ Governor is always willing to provide some upbeat comments, saying the economy is on the path of sustain recovery. Haruhiko Kuroda confident the planned tax increase will not derail the upturn and once again urged for repairing the government's tattered finances. He also called that bringing consumption tax to 10% by October 2015 is a crucial step in helping to curb the growing size of the nation's public debt. Currently, the world's third largest economy's debt is approaching 250% of its annual economic output- the highest level among developed economies.
Meanwhile, in order to assure more sustained recovery and try to nudge nation's risk-averse banks to create more credit, the Bank of Japan is planning to extend three special loan facilities. The loan programmes have been created between 2010 and 2012 under formed Governor Masaaki Shirakawa's leadership to support bank landing, and so far these schemes have provided more than $81 billion in lending. The BoJ is expected to review the loan programmes by the end of this year, before their expiry date of March 2014. These intensions signal policy makers' commitment to driving funds through the banking sector directly to borrowers, even as they are continuing injecting money through its unprecedented stimulus programme.
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