Japan fiscal focus must be on rebuilding: IMF

WASHINGTON (Reuters) - Japan has the financial capacity to meet humanitarian and infrastructure needs arising from a devastating earthquake and tsunami, and fiscal policy should focus on rebuilding efforts, the International Monetary Fund said on Thursday.

IMF spokeswoman Caroline Atkinson emphasized that the most important policy priority for Japan now was to focus on restoring the economy quickly.

"We believe the Japanese economy is a strong and wealthy society and the government has financial resources to address (its) needs," she told a regular news briefing.

Atkinson said the IMF would update its forecasts for Japan's economy and the world on April 11 when it presents its World Economic Outlook report in Washington, although noted it was a complicated situation to analyze given the unfolding nuclear threat.

Atkinson declined to comment on the appreciation of the Japanese yen, saying only that during the country's Kobe earthquake in 1995 the currency also rose.

"We do believe that what the Japanese government has been doing ... to take decisive actions to ensure the stability of the financial system and to do what is necessary to meet the needs of the people, and then to rebuild infrastructure, is the appropriate policy," she said.

"The appropriate response to the fiscal issues in Japan are also about having a medium-term credible plan," she added.

(Reporting by Lesley Wroughton; Editing by Chizu Nomiyama)