currently, policymakers in both japan and the united states face the challenge of designing policies that provide a credible commitment to medium - term deficit reduction without disrupting the fragile recovery. but once in place, such policies should help reduce uncertainty and boost household and business confidence. japan would also benefit from measures to increase its potential growth, which is generally estimated to have fallen to less than 1 percent and could decline further as population aging progresses. it is widely believed that easing regulations could promote faster productivity growth, particularly in the services sector. declines in the working - age population also make it desirable to boost labor force participation. higher employment and faster productivity gains would help to boost economic activity, enhance fiscal sustainability, and restore japan ’ s contributions to global economic growth. conclusion growth in the advanced economies is still hampered by critical challenges and full recovery is likely to take several years. emerging market economies, particularly in asia, have performed better, but both they and the global economy more generally would benefit by further rebalancing of their growth toward domestic demand. japan initially bounced back more quickly than other advanced economies from the global financial crisis, but its growth has slowed recently, and it also faces serious fiscal and structural challenges. by addressing these challenges, japan can enhance its long - term prospects and continue to play a leading role in asia and the global economy. bis central bankers ’ speeches

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