As Prime Minister Naoto Kan's new Cabinet goes into full swing, it is important for the government to adopt and carry out effective economic policies speedily. With economic policy, not only substance but also psychological factors are important.
Under the shadow of long deflation, people and enterprises are suffering from a sense of helplessness. The government should present policy measures that help them discard their gloomy outlook and take a positive view of the future.
As Japan faces strengthening of the yen and the downward trend in stock prices, the crucial task for the Kan administration is to take every step to prevent the Japanese economy from falling into a second dip.