Saturday, 29 December 2012 01:57
TOKYO: The Japanese economy is facing many hurdles as it struggles to reverse long-term deflation, according a report from ratings agency Standard & Poor's on Friday.
The Liberal Democratic Party took power this week on a campaign that pledged to inject new life into the limp economy, after it won a landslide election earlier this month.
S&P said the election raised hopes the world's third-largest economy may be able to escape the deflation that has haunted it for years, and recommended that policy makers "aggressively implement" measures to do so.
"It is positive that the Japan reflation issue is in play again and, with the change in government, Japan is likely entering a period of both policy and market action," said S&P's chief economist Paul Sheard.
"However, the hurdles to a policy-induced reflation are many, and they are high."
The report said past actions by the Bank of Japan were not enough and warned it ...