Japanese cabinet ministers welcomed the Group of Eight summit’s stance on Tokyo’s sweeping stimulus policies as a vote of confidence in the government’s strategy to end 15 years of entrenched deflation and revive a lackluster economy.
Japan’s economics minister also moved to parry any suggestion that Prime Minister Shinzo Abe’s policies, known as “Abenomics”, are aimed at intentionally weakening the yen to benefit the country’s exports.
“Abenomics” combines fiscal stimulus, expanded debt purchases by the Bank of Japan and economic reforms, but some argue the policy mix could worsen Japan’s debt burden, devalue the yen and disrupt global capital flows.
The euro zone came under pressure from other rich economies on Monday to press on with a banking union and Japan was urged to follow up on massive central bank stimulus with structural reforms and measures to tackle its budget deficit.
Leaders of the Group of Eight rich nations, which include Germany, France and Italy, said a further strengthening of the rules underpinning the euro zone, including moves toward a banking union, was “strongly needed.”
Euro zone finance ministers are due to discuss Europe’s banking union plans on Thursday ahead of a European Union leaders’ summit next week.
European officials are seeking to design a scheme to close troubled banks to complement a new system of cross-border supervision led by the European Central Bank from next year.
Prime Minister Yoshihiko Noda found himself in the spotlight when he was given a surprise treat during his first stint at the Group of Eight summit — a birthday cake from the current G-8 host, U.S. President Barack Obama, with the rest of the G-8 leaders celebrating with him.
On discussions at the annual summit, Noda, being the head of the only Asian nation in the grouping, took the opportunity to put North Korea and Myanmar on the agenda, while reiterating Japan’s contribution to efforts to ease Europe’s sovereign debt crisis.
But despite Noda’s pitch about Japan’s role in the G-8 framework, it was not enough to steal the thunder from newly installed French President Francois Hollande, or reposition Japan into significance in the same manner it did at last year’s meeting when the nuclear crisis caused by the March 11 earthquake and tsunami put it at the forefront of ensuring nuclear safety.