Japan must take fiscal measures to shrink its budget deficit, said Thomas Byrne, a vice president at Moody’s Investors Service in Singapore, when asked to comment on Yoshihiko Noda’s selection today as incoming prime minister.
The “stable” outlook Moody’s has on Japan’s debt rating, lowered to Aa3 last week, means the company expects “some sort of progress on deficit reduction in the immediate years ahead,” Byrne said in a telephone interview. The developed world’s most indebted nation cannot rely on economic growth alone to contain its expanding obligations, making it essential for the new administration to unveil more details on a plan that outlines measures to reform its tax and social security systems, he said.
Byrne added that the task for Noda, who was elected by Democratic Party of Japan lawmakers to succeed Prime Minister Naoto Kan as party chief, would be to stay in office for long enough to oversee the implementation of measures to mend its finances. Noda said at a press conference he plans for the Diet to vote tomorrow for him to become prime minister.