The Finance Ministry is particularly concerned that an eventual rise in interest rates would raise the government's borrowing costs and hurt its attempts to trim public debt, which at 150% of gross domestic product is among the worst in the industrial world. Prime Minister Junichiro Koizumi warned that the BOJ could not make a mistake and derail Japan's hard-won economic recovery.
The economy grew at a blazing 5.5% annualised rate in the final three quarters of 2005. "If the lifting of monetary easing fails, it (the BOJ) cannot go back again. I am sure a wise decision will be made," he told a parliamentary committee at which BOJ Governor Toshihiko Fukui was present.
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