Reuters: US Dollar Report: Japan top policy panel sticks to fiscal reform targets

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Japan top policy panel sticks to fiscal reform targets Jun 6th 2013, 09:33 TOKYO, June 6 | Thu Jun 6, 2013 5:33am EDT TOKYO, June 6 (Reuters) - Japan aims to stick to its targets for fiscal consolidation to curb its massive public debt, the government's top macroeconomic policy panel said on Thursday, despite concerns that Prime Minister Shinzo Abe might back pedal on the promises. The previous Democratic Party-led government had set targets of halving its primary deficit - the budget excluding new bond sales and debt servicing - by March 2016 and returning to surplus by March 2021. The Council on Economic and Fiscal Policy (CEFP) also said Japan aims to lower the country's debt-to-GDP ratio in a stable manner after achieving the primary balance target. Japan's public debt is already more than twice the size of its 500 trillion yen ($5 trillion) economy and any sign that the government was backing off on the fiscal reform targets or on its plan to double the five percent sales tax by October 2015 could make the Japanese government bond market nervous. Abe, who took office last December after his Liberal Democratic Party's (LDP) big election win, has made his "Abenomics" prescription for rescuing the economy from deflation and engineering sustainable growth his top priority. CEFP has legal authority to craft long-term fiscal and macroeconomic policies, and it issues policy guidelines around this time of the year, which will be reflected in an annual budget and other key policies.

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