The International Monetary Fund advised Japan to continue fiscal stimulus as growth is likely to weaken in 2018.
The lender urged the Bank of Japan to maintain a sustained accommodative monetary policy stance.
IMF First Deputy Managing Director David Lipton made the comments during a press conference here when he presented the IMF's annual evaluation of Japan's economy, reports Efe news.
In its assessment of Japan released Monday, the IMF said the country needs a well-coordinated reform package combining continued fiscal and monetary support with structural reforms.
In Tweet, Trump Turns On Rod Rosenstein Over Investigation 'Witch Hunt'
The probe has reportedly expanded to include whether Trump fired Comey in an attempt to obstruct justice . Published reports have indicated that Mueller is looking into whether Trump tried to obstruct justice .
The financial organisation also proposed measures such as phasing out references to its annual purchase targets of government bonds set at 80 trillion yen ($721 billion), among others, aimed at improving its credibility and investor confidence.
It said the Government should "place emphasis on a gradual, pre-announced schedule of consumption tax rate hikes, of 0.5 to 1.0 percentage points in regular intervals, starting as soon as possible, and continuing until the rate reaches at least 15 percent".
The Abe administration has postponed its planned tax hike to 10 percent from the current 8 percent until October 2019.