The longer-term objectives of building up the foreign reserves to a more comfortable level, of reducing the role of the Reserve Bank in the forward foreign exchange market, and of phasing out the remaining foreign exchange controls were temporarily forced on the backburner, whilst monetary policy had to be directed more decisively towards an adjustment programme that would gradually restore stability in the market for foreign exchange.
In order to strengthen the growth potential of Japan’s economy, in addition to efforts made by the private sector, it is critical that the government take action.