Press Conference by the Deputy Chief Cabinet Secretary (Excerpt)

Q&As

• The issue of Japanese economy trend
• The issue concerning the Abenomics growth strategy

REPORTER: I have two questions. My first question concerns the downgrade yesterday of Japan’s debt rating by the United States-based corporation Moody’s. I realize this is a private company matter, but can you possibly share your thoughts with us? Secondly, financial authorities as well as members of the ruling parties in favor of fiscal rehabilitation were quite worried that the postponement of the consumption tax increase would lead to a major credit company, either Standard & Poor’s or Moody’s, downgrading Japan’s rating. What is your opinion now that their concerns have become a reality?

DEPUTY CHIEF CABINET SECRETARY SEKO: First of all, I would like to refrain from commenting on every rating and analysis made by private rating agencies. In any case, the Prime Minister has stated that maximum efforts will be made to achieve the goal of halving the primary balance by FY2015 through the budget formulation process. Furthermore, in order to secure confidence in Japan, the Prime Minister has committed to the goal of achieving fiscal soundness by FY2020 and drawing up concrete plans by next summer for achieving this goal. Therefore, Japan will continue to carefully explain its policies in as well as outside of Japan and make maximum efforts to achieve the goal of fiscal soundness, while steadily implementing our growth strategy. With regard to Japanese Government Bonds (JGB), we will execute appropriate management policies while closely following international market trends and other trends. This was an analysis made by one of the rating agencies. Be that as it may, I have had various opportunities to talk with those in the market, and many of them have praised the Prime Minister for his resolve to achieve economic growth in 18 months and increase the consumption tax to 10% by removing the clause that makes the increase contingent on economic conditions, and for his determination to press ahead with both wheels of the cart, namely, growth and fiscal rehabilitation.

REPORTER: In connection with your response just now, Deputy Chief Cabinet Secretary Seko, Moody’s identified not only the postponement of the consumption tax increase as a driver for the downgrade, but also the uncertainty remaining with respect to the Abenomics growth strategy – a central issue of the elections campaign. Can you please explain the growth strategy one more time? 

DEPUTY CHIEF CABINET SECRETARY SEKO: As Prime Minister Abe has stated at the party leaders’ debate and other occasions, the figures for employment and other data have been considerably positive. Stock prices have also doubled from their values before the change in government. A host of strong numbers has been posted. In order to further ensure that these achievements are permanent, we will continue to press forward with the three arrows of Abenomics.

(Abridged)

REPORTER: I would like to return to the subject of Moody’s. One of the reasons for the downgrade was also the increased risk of rising JGB yield. What is the Government’s view regarding the JGB interest rate? Also, what kind of an impact do you expect the downgrade will have?

DEPUTY CHIEF CABINET SECRETARY SEKO: In any case, as I stated moments ago, the Government will continue to implement appropriate JGB management policies while closely following market trends. That is the bottom line.