Though the economy is close to bottoming out, the light at the end of the tunnel is still dim. Given that situation, the following two monetary measures cannot be omitted to keep the financial situation stable.
First, the Bank of Japan needs to restart purchasing commercial paper as well as corporate bonds when necessary. The central bank is also required to continue its financial support to businesses through measures such as injection of more liquidity into financial markets until the economy surely comes back on the recovery track.
Secondly, the BOJ's credit easing measures need to go on and additional policy for vitalization of housing construction markets should be introduced. The current supply-demand imbalance is huge and there still exists concern that price decline and asset deflation would become chronic.
The G20 governments rightly agreed to continue stimulus measures until the global economy is back in good shape and shows no signs of concern. The Japanese government needs to show a mid-long term picture of package reform of tax, finance and social security system.
Japan-U.S. alliance, the core of Japanese diplomacy is anticipated to become more solid and robust through meetings with the President in Japan. Continuity of policy should never be neglected in the field of diplomacy and national security. The Japanese government needs to show its basic stance on US related pending issues without delay to deepen mutual understanding and trust between the two countries.
Exhaustive review of the national budget and government's projects in the light of necessity, efficacy, efficiency and adequacy with a strong political leadership will contribute to simplification of the administration system as well as cutting on unnecessary spending of national treasure.