OECD's annual survey of the Japanese economy. The survey opens with a review of recent trends and prospects. Chapter II discusses monetary policy and the problems posed to the recovery by the weakening bank balance sheets and higher costs of capital. Chapter III analyzes fiscal policies. Chapter IV examines various aspects of competition policy, with special emphasis on Japanese business practices, the enforcement of the Anti-Monopoly Act, and their implications for foreign entry. The conclusions drawn from the survey are presented in Chapter V.