Japan's economy finally started to return to a full-fledged recovery path with the resolution of the "three excesses" of production capacity, employment, and debt. In the case of the U.S. economy, key factors for the economy to recover will be how adjustments in the household sector progress and to what extent financial institutions can write off their losses and enhance their capital bases.
Future  BIS Review 4/2009  3  developments in the world economy will be critical as well. Looking back, Japan's economic recovery materialized with the support of high growth in overseas economies. However, the current situation is difficult in that this time the outlook for the world economy is highly uncertain. II.