TOKYO (AFX-ASIA) - The Japanese government is determined to push through economic reform and will set out its medium-term economic and fiscal policies at end-June, State Minister for Economic and Fiscal Policy Heizo Takenaka said.
He said the government will aim to resolve bank bad debt problems and increase competitiveness in the next two to three years, although fiscal restructuring would not go ahead until after that.
"The economic and fiscal policy council is going to announce the new direction of policy at the end of June, in a new, co-ordinated and consistent way," Takenaka told the Financial Times in an interview.
The policy will be centred around a drive to get rid of non-performing loans, efforts to create a more competitive economy through rapid deregulation, and moves to reduce the budget deficit. The first and second steps would occur in tandem, in the next two to three years, but serious fiscal consolidation would not start until later, he said.
Japan "will see some increase in unemployment" as a result of any banking sector clean-up, Takenaka said, but added: "This might not be quite as bad as some journalists fear" because new jobs could be created in the service sector.
He added that the government "would like to continue a very decisive monetary easing" to combat the deflationary impact of the bad-loan clean up.