Japan should set a "well-articulated" target to reduce government debt that is already the largest in the world, according to Moody's Investors Service.
"Deficit reduction and a debt target would help support a rating," Moody's Senior Vice President Thomas J. Byrne said Tuesday in Singapore. "Things we are most concerned about are the lack of well-articulated long-term fiscal consolidation and a debt reduction plan."
The Cabinet approved a budget guideline Tuesday for the year starting April 1 and said it will keep new bond issuance at around ¥44 trillion. Faced with declining tax revenue and a ballooning public debt burden, the Democratic Party of Japan is faced with the challenge of maintaining fiscal discipline without choking off a recovery from the country's worst postwar recession.