ROME (MktNews) - Past experience has shown that the usual approach of the G-7 group of leading industrialized nations in making policy recommendations to Japan is not very effective and that a new strategy would be advisable, IMF Managing Director Horst Koehler reportedly told Thursday's edition of an Italian newspaper.
The interview, in Il Sole 24 Ore, contained few direct quotes, but Koehler was paraphrased as saying that too much pressure and too much advice from Japan's G-7 partners should be avoided.
Such an approach "has a limited effect," Koehler was quoted as saying, and a more subtle, less hectoring approach should be considered.
Koehler was speaking ahead of Saturday's G-7 meeting in Palermo, Italy.
Koehler also said Japan should not be encouraged to adopt new fiscal stimuli because of their negative impact on public finances. On the other hand, he identified room for maneuver in monetary policy and suggested that if economic indicators deteriorated further, Japan should consider "non-conventional measures to bring liquidity to the system." He did not elaborate on these.