Prime Minister Junichiro Koizumi is facing a number of challenges as he struggles to put the fledgling economic recovery on a more solid footing in 2004.
Of all the risks, three are major threats -- a slowdown in the U.S. economy, a sharp rise in the yen against the dollar and turmoil over reforms of Japan's pension system, which is creaking under the weight of an aging population.
"Our first priority is to lead the nation's economy, which is finally showing signs of brightness, to sustainable, private sector-led growth," Finance Minister Sadakazu Tanigaki said.