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New Japan PM Likely To Continue Reforms Says Moody's

Japan's new Prime Minister Shinzo Abe looks set to continue structural reforms while taking care to avoid jeopardizing the economic recovery, Moody's Investors Service said in a report Oct. 3.

The credit ratings agency said it believed Abe's policies could improve Japan's creditworthiness by focusing on fiscal consolidation and striving to sustain a broadly based recovery in economic growth. "More will be revealed on the policies of the Abe administration in the weeks ahead but it seems evident at this point that backsliding to accommodate political spending pressures is not likely to happen," said Moody's analyst Thomas Byrne.

"Moreover, the BoJ (Bank of Japan) does not intend to tighten monetary policy prematurely, which is critical to continued nominal GDP (gross domestic product) growth," he added.

The report struck a more upbeat tone than one last week from rival credit ratings agency Standard and Poor's, which warned: "The temptation to implement economic stimuli in the form of increased spending on public projects may be too difficult for the new government to avoid."

Copyright Agence France-Presse, 2006

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