TOKYO, April 25 - Japan's top financial diplomat Haruhiko Kurodasaid on Wednesday that the Group of Seven industrial nations is expected towelcome the Japanese government's bad loan disposal scheme unveiled earlierthis month. "Promoting bad loan disposals with a limited time frame should bewelcomed," Kuroda told in an interview. Japan's structural reform may cause deflation but it is necessary to implement,Kuroda said. "In order to achieve a sustainable growth in the Japanese economy, it isnecessary to implement structural reforms, although we cannot rule out adeflationary impact temporarily," Kuroda said. The government earlier in April announced an emergency economic package,which includes setting up a stock-purchasing entity funded by public money. The package is aimed at helping banks to clean up an estimated 32 trillion yen($261.7 billion) in bad loans in about two to three years. Kuroda said the slowing of the U.S. economy will be the key issue at the G7meeting to be held in Washington this weekend. He said that with U.S. consumption staying firm, the U.S. economy is unlikely tofall in recession. The issue of currency rates will not be a major topic at the meeting, he predicted. "Japan's stance (on currencies) has not changed. Currency movements shouldreflect economic fundamentals," Kuroda said.