 Japan's finance minister sees better times ahead |
Japan's finance minister has given an upbeat assessment of his country's economy, signalling that it may finally shake off deflation by the end of 2006. Sadakazu Tanigaki said strong domestic demand and healthy corporate earnings were helping to revive the economy.
Speaking in New York, Mr Tanigaki added that Japan would probably "overcome deflation within this year".
The world's second-largest economy is slowly emerging from recession and years of falling consumer prices.
The country has been struggling to combat deflation, which hurts the economy by holding back demand as consumers put off buying goods in the expectation that prices will become cheaper.
Bank warning
Mr Tanigaki said strengths in Japan's corporate sector were filtering down to the household sector in the form of rising employment and wages.
"These positive developments surrounding the households have led to a pickup in consumer spending," he told the Japan Society in New York on Monday.
Recent figures showed that consumer prices gained by 0.1% year-on-year in November, the first rise in more than two years.
"Japan is back. I'm delighted that I can deliver the good news of the revival of our economy," Mr Tanigaki said.
However, Japan's government has been urging the country's central bank to avoid hastily tightening its economic policy for fear of snuffing out an economic rebound.
The Bank of Japan has had a policy of low interest rates for almost five years in an effort to breathe life into the economy.
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Japan is back - I'm delighted that I can deliver the good news of the revival of our economy
