Economists expect Japan's output to grow less than 1 percent this year. The Japanese government this week conceded Japan is seeing deflation. When prices drop, the Japanese public is reticent to spend and invest. That has put a dampener on the economy in the past. One of the first areas crying for change is its banking industry.
Experts call for banks to write off a huge number of bad loans on their books.
Estimates on the amount vary. Japanese banks have refused to call in many past-due business loans. As a compromise, they typically offer to build loan-loss provisions instead. Reform proponents say the banks hurt the economy by propping up inefficient companies that should have gone out of business. He noted bad-loan estimates are based on official figures.