Prime Minister Naoto Kan attended the eighth meeting of the Council on the State of the Economy held at the Prime Minister's Office.

Discussion took place on economic outlook for the immediate future and mid- to long-term prospects for economic and financial policy.

Based on the discussion, the Prime Minister said, "We shared the awareness that it is possible to halve the so-called primary balance deficit, concerning fundamental fiscal revenues and expenditures, of the national and local governments by FY2015 by addressing the comprehensive reform of social security and taxation systems in the mid- to long-term.
On the other hand, the future of the Japanese economy faces downside risk due to sovereign risk overseas, exchange rate fluctuations, and other causes. In particular, as of recent the exchange market has displayed a one-sided trend of an increasingly appreciating yen. I intend to continue to pay attention to the market and respond to the situation appropriately.
In order to overcome these risks and revitalize Japan's economy it is important that we reinforce Japan's growth potential and secure fiscal discipline.
I ask each Minister to maintain this awareness first in implementing a policy response that emphasizes the reinforcement of Japan's growth potential while steadily advancing efforts to restore fiscal health starting with the comprehensive reform of social security and taxation systems."