Japanese economist warns rate hike inadequate, urges structural reform

A leading Japanese economist has warned that the Bank of Japan's anticipated interest rate hike will not address the country's fundamental economic problems, calling instead for structural reforms and stronger support for small and medium-sized enterprises.

The economist's comments come as the yen exchange rate continues to hover near 160 yen per U.S. dollar, with Japanese media and financial markets widely expecting the Bank of Japan to announce a rate hike at its monetary policy meeting on June 15 and 16.

"Japanese political and economic scholar Hamada Kazuyuki said: "The future trend of the Japanese economy is also affected by factors such as rising crude oil prices and inflation, and there are no signs of these problems being resolved anytime soon. If left unchecked, they will develop into a serious inflationary trend. This will not only affect enterprises but also the daily lives of ordinary people. Therefore, in order to curb these impacts, the Bank of Japan is taking countermeasures and adjusting toward the direction of raising interest rates. However, whether these measures can truly be effective still remains highly uncertain," he said.

He also noted that the operations of small and medium-sized enterprises in Japan continue to face pressure, and the overall recovery of the Japanese economy is filled with uncertainty. The Japanese government's model of relying on debt to rescue the market only addresses symptoms rather than root causes and cannot solve the fundamental problems of the Japanese economy, he added.

"More than 80 percent, or even 90 percent, of Japanese enterprises are small and medium-sized enterprises. Only a small number of large enterprises have gained profits from exchange rate fluctuations. The vast majority of small and medium-sized enterprises are already on the edge of life and death. Therefore, without more adequate support policies for small and medium-sized enterprises, it will be very difficult for the Japanese economy to achieve recovery or restoration. The current government is in a rather difficult situation. Originally, it said no supplementary budget was needed, but as the economy deteriorates, it has no choice but to rely on supplementary budgets and deficit financing to barely cope. But this is not a fundamental solution. Continuing down this path will only make Japan's situation further deteriorate. Therefore, if the government truly wants to improve the economy, it must cut waste within the existing fiscal scope and concentrate resources into truly effective areas. This is the necessary direction," he said.

Japanese economist warns rate hike inadequate, urges structural reform

Residents from Colombian capital city of Bogota expressed their gratitude to China's humanitarian aid supplies for the country's quake-affected communities after a shipment of 80-tonne relief supplies arrived on Tuesday.

A magnitude 7.5 earthquake struck western Colombia on Aug 10. The death toll from the quake had risen to 304, with 4,548 people injured and 426 others missing, the country's disaster management agency said Tuesday.

The items, including generators, mobile water purification vehicles, medical disinfection gears, solar-powered lights, tents, and blankets, are urgently needed in the country which is facing the enormous challenge of relief and reconstruction.

"This is excellent. The earthquake was devastating and we are thankful to China and everyone who is helping and putting their grain of sand," said Raimundo Montemiranda, a security guard.

"Thankful to this help, and any help is going to be helpful from people and countries. This is solidarity and the unity of the world," said Eduardo Prieto, an insurance salesman.

Colombian President Abelardo de la Espriella said Monday night that about one-third of Colombia had been affected by the quake, which was centered in San Jose del Palmar in the department of Choco.

He said preliminary estimates put direct economic losses from the earthquake at nearly 30 trillion Colombian pesos (about 9.6 billion U.S. dollars), including 24.5 trillion pesos in building damage and 5.5 trillion pesos in infrastructure damage.

Domestic and international humanitarian aid are both keeping pouring into the hardest-hit areas while search and rescue teams are still working in places where people may remain trapped under the rubble.

Bogota residents express gratitude to China's quake relief supplies for Colombia