IMF calls for quick reform of Japanese public finances

Japan should work on its huge public sector debt and budget deficit and Japanese banks should secure more capital, a senior International Monetary Fund (IMF) official has said.

It is important to reach a specific agreement on how to restore the public finances as soon as possible, IMF deputy managing director Naoyuki Shinohara said on Wednesday, according to Kyodo news agency.

However, Shinohara maintained that Japan's fiscal problems do not pause an immediate danger as the Japanese public has lots of savings, and most of government debt is financed by domestic investors. But he said leaving the situation as it is would lead to serious problems in the future.

The IMF deputy head also said Tokyo should boost growth rates through structural reforms in order to counter a slowdown triggered by fiscal tightening.