Japanese Prime Minister Junichiro Koizumi today said his country was showing patchy but steady signs of recovery, but again stressed that structural reforms were still needed for sustained growth.
"While the Japanese economy is still in a difficult situation, the results of reforms are steadily appearing, and some parts of the economy are beginning to show improvements," Koizumi told a Council of Foreign Relations seminar on his second day of a visit to the United States.
Koizumi will meet with U.S. President George W. Bush on Thursday when Bush is expected to make his case for a preemptive military strike against Iraq. The White House accuses Iraq's leader, Saddam Hussein, of developing weapons of mass destruction and argues that his track record of aggression poses a global threat.
A Bush administration official said today that Bush and Koizumi will also discuss their two countries' economies.
"Iraq's denial of U.N. weapons inspectors ... is of great concern. The fight against terrorism has made progress because of cooperation. Japan believes that such unity and collaboration should be preserved ... Iraq must comply with U.N. resolutions. It must immediately and unconditionally dispose of weapons of mass destruction. Japan would support this effort along with the U.S," Koizumi said.
On Monday Koizumi said the world needed to be convinced that an attack on Iraq was merited.
His visit to the United States also comes at a time when policymakers in Japan are trying to work out a package to stimulate the economy, bolster the sagging stock market and slow the deflationary trends which have plagued the economy for years.
Monetary policy is also stretched, with the Bank of Japan already flooding the money market with liquidity, effectively keeping short-term interest rates almost at zero.