Senior IMF official:
- China's property sector problems have not been addressed in a comprehensive way, leading to consumer confidence plummeting.
- The risk of deflation in China has increased, which hurts Asian countries that must compete with China's falling export prices.
- Any kind of political uncertainty has a bearing on sentiment and economic activity, when asked about Japan's general election outcome.
- Since the Bank of Japan is normalizing monetary policy and interest rates are rising, it's even more important for Japan to start fiscal consolidation in earnest.
- Any new initiative or fiscal support that Japan deploys should be targeted and funded within the budget, instead of by issuing more debt.
- Any further rate hikes by the Bank of Japan should be gradual and data-dependent.
- Japan is fully committed to a flexible exchange rate regime, when asked about authorities' recent remarks describing yen moves as 'one-sided and sharp.'
***
Despite it being the IMF its hard to argue with any of those points!
