IMF's Zhu says too early to judge Japan stimulus drive

Zhu said the recent rise in Japanese government bond yields showed that investors had concerns abut the long-term sustainability of Japan's debt, but that it was too soon to say whether 'Abenomics' as it is known had backfired.

"In Japan it is fiscal stimulus bringing the GDP growth but obviously it also increases the debt burden and inflation expectations and the market is concerned so you see an increase in JGB (Japanese bond) yields," Zhu told Reuters on the sidelines of a speech at the London School of Economics.

"The market is looking, and we are looking, for more concrete measures to implement the growth strategy then we will see how the yield will change ... A few days back the government announced a fiscal and growth strategy which is very good and very welcome."

Zhu's speech had focused on the huge financial shifts going on around the globe as emerging markets grow in size. In a question-and-answer session he also touched on China's growing influence in the IMF itself.

"I can't say this will change the Fund's policy on lending but China will have a strong voice," Zhu said. It will "bring more Chinese and EM (emerging markets) experience which is very much appreciated and make the Fund's lending and policy more suited to the changing world."

The IMF's No. 2 official also praised the planned trade deal between the United States and the European Union announced on Monday.

"When you enhance the trade between the U.S. and Europe you can bring a lot of opportunity for Asia and Latin America. It is a whole supply chain, not just one country trading with another," he said.