Japan to stay on course for fiscal discipline under Noda+

TOKYO, Aug. 29 Kyodo -
The Japanese government is likely to continue to place priority on restoring the nation's fiscal health, the worst among major developed economies, following Finance Minister Yoshihiko Noda's victory in the ruling Democratic Party of Japan's leadership election on Monday that paved the way for him to become the new prime minister on Tuesday.
But the new premier will also have to manage policy to spur the country's economy, which is struggling amid the recent sharp appreciation of the yen as well as the aftermath of the March 11 earthquake and tsunami. This could limit the government's options in pursuing austerity measures.
The government cannot just present a rosy picture but also has to ''make requests of the public'' sometimes, Noda said while vying with other candidates for the presidency of the DPJ.
Noda's comment reflected his position regarding raising some taxes temporarily to secure funds for reconstruction following the March disaster, rather than newly issuing debt as called for by the other candidates.
Long-term debt issued by the central and local governments in Japan is expected to total around 894 trillion yen ($11.7 trillion) at the end of next March, equivalent to 185 percent of the country's gross domestic product.
Moody's Investors Service Inc. downgraded its credit rating for Japanese government bonds last week for the first time in nine years, citing the towering budget deficit and debt. The move followed a similar downgrade by rival Standard & Poor's in January.
==Kyodo