Japan should focus on spending cuts in meeting its pledge to turn its primary budget deficit into a surplus, though setting rigid numerical targets would be inappropriate, according to a draft proposal by the ruling party’s panel on fiscal reform, Reuters reported. While the central bank’s massive stimulus program has kept borrowing costs very low, Japan’s fiscal balance will worsen when the Bank of Japan seeks to end its ultra-loose policy and lead to a rise in interest rates, according to the draft obtained by Reuters on Tuesday. “There is no room to delay” the fiscal 2020 deadline the government set for itself in turning Japan’s primary budget deficit into a surplus, according to the draft.
