Moody's doesn't expect Japan to meet its fiscal 2025 primary budget-balancing target, but that won't trigger negative ratings action because the goal is still a "commitment" to fiscal reform, its Japan sovereign analyst has said.
"No, failure to meet the target is not a trigger," Christian de Guzman said in an interview Monday. "Even six to seven years ago we were saying they are not going to hit the target. But even back then, we did not pursue any sort of negative rating action."
If Japan abandons that commitment and significant deterioration in the fiscal deficit leads to much higher debt, Moody's would examine the pillars of the rating, he said.
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