It is widely agreed that Japan should further strengthen its financial system and carry out other structured reforms to provide further flexibility in the economy. Further flexibility in exchange rate policies is desirable for the emerging market economies. Any attempt by EMEs to intervene excessively and sterilize their forex reserves to maintain their competitiveness will further delay the adjustment process.
However, as indicated earlier that unless there are substantial changes in exchange rates, it seems that one cannot expect corrections to global imbalances.