“Unless we work on fiscal rehabilitation, an international organization such as the International Monetary Fund could control our fiscal management,”
The remarks, following the Democratic Party of Japan’s release of its manifesto for the July 11 vote, show international crises such as the one in Greece have raised awareness in Japan, where debt is approaching 200 percent of annual economic output. Kan called Japan’s reliance on borrowing “unsustainable”
The DPJ called for cross-party talks on raising the nation’s 5 percent consumption tax, according to the election document distributed to reporters yesterday. The plan also reiterated a goal of 3 percent nominal economic growth over the next 10 years and dropped an earlier pledge to double a monthly childcare allowance to 26,000 yen ($285).
“The Greek crisis has greatly affected Japanese public sentiment,” said Hiroyuka Maruyama, Global Markets CEO at Oppenheimer Lloyd in Tokyo, said by phone. “The DPJ won’t lose votes by calling for a tax hike because the public feels it’s better to share some burden rather than seeing their country go bankrupt,” the Oppenheimer Lloyd CEO said.
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