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Japan plans economic exit strategy

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Japan's Finance Minister Hirohisa Fujii has flagged the need to implement an exit strategy with regard to the country's expansionary monetary policies, but notes it is too early to do so considering the current state of the economy. Despite a revival, the Japanese economic recovery will be slow due to rising unemployment and falls in export revenue compared with last year, warranting the continuation of policy support. "While it is necessary to discuss exit strategies, at this moment, their implementation is still premature," he said. The Bank of Japan intends to keep its interest rates near zero until 2011, but will consider phasing out corporate finance support, which was implemented as an emergency step, upon expiry in December. Fujii has also mentioned the Japanese government will support the International Monetary Fund's call for funds to help low income countries through the global economic downturn with a US$2.7 billion loan, which may further delay policy changes.

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