Markets are focusing on whether the government will uphold or tweak its target to achieve a primary budget surplus, excluding new bond sales and debt servicing costs, by the fiscal year ending in March 2026, and lower the debt-to-GDP ratio.
Language on the budget target will offer clues on how much focus Prime Minister Fumio Kishida’s administration will put on getting Japan’s fiscal house in order amid prospects of further interest rate hikes by the Bank of Japan.
The sources spoke on the condition of anonymity because the matter is private.
The government first set a primary budget balance goal in the early 2000s, but the target remains elusive, forcing the government to push it back several times.
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