Kan says muted market impact of S&P rating cut is 'good'
TOKYO, Jan 29 (Kyodo) - Prime Minister Naoto Kan said Friday it was ''good'' that the latest downgrade of Japan's sovereign debt rating by Standard & Poor's has not had a big influence on financial markets.
''Today, there was no big impact on markets by this and on this point it was good,'' Kan told reporters in the evening. ''I believe there is still confidence in our country.'' Kan made the remarks a day after S&P cut Japan's long-term sovereign debt rating for the first time since 2002, saying his government ''lacks a coherent strategy'' for reducing its huge debt burden.
Before leaving his office for the Swiss resort of Davos to attend the annual gathering of the World Economic Forum, the premier also said he is well aware of the significance of credit ratings and Japan remains committed to fiscal consolidation.
''When serving as finance minister, I was faced with the Greek debt crisis and reminded of how important fiscal discipline and government bonds are,'' Kan said in a parliament session earlier in the day. ''What is important is maintaining fiscal discipline and market confidence in our country's fiscal management.'' Kan said his government will continue to fix the country's public finances based on its fiscal management strategy mapped out last year, in which it seeks to bring the primary balance -- annual revenues minus outlays other than debt-servicing costs -- back into surplus by fiscal 2020.
Kan was finance chief just before assuming his current post in June and played one of the central roles in crafting the mid- and long-term fiscal restoration strategy.
Hirohisa Fujii, also a former finance minister and currently a deputy government spokesman, said the government must ''humbly accept'' the latest assessment by the U.S. rating agency.
The agency said it does not predict Japan achieving a primary balance before 2020 ''unless a significant fiscal consolid! ation pr ogram is implemented beforehand.'' Some opposition party lawmakers launched verbal attacks on Kan's initial response to the downgrade on Thursday.
When Kan met with the press about an hour after S&P released the downgrade, he said, ''I just heard about the news for the first time...as I am ignorant about this kind of thing, I'd like to talk about it some other time.'' New Komeito party leader Natsuo Yamaguchi criticized Kan for making such a statement without ''a sense of crisis'' as a national leader.
''I couldn't believe what I was hearing,'' Yamaguchi, who heads the second-biggest opposition party, said in an upper house plenary session.
Kan, meanwhile, told Yamaguchi what he had meant by using the word ''ignorant'' was that he did not have information at hand at that time as he was in a Diet session shortly before taking questions from the press.
His Cabinet ministers also defended Kan on Friday, saying his usage of the word ''ignorant'' has been misinterpreted.
Chief Cabinet Secretary Yukio Edano said at a news conference that he confirmed that Kan had not been informed about the downgrade before meeting with the press on Thursday.
Edano also said the downgrade was important information but ''this is an assessment by one private company'' and it was not a matter that needed to be told to Kan as soon as possible, given that there are more urgent issues, such as the fast-spreading outbreak of avian influenza in Japan.
''There is no way that he is ignorant of ratings or issues related to government bonds. I'd like to make this point perfectly clear,'' Finance Minister Yoshihiko Noda said at a news conference.
Kaoru Yosano, economic and fiscal policy minister, told reporters he does not see any problem with Kan's first response, saying he has never heard a national leader abroad making comments each time a rating agency makes an assessment.
Financial Services Minister Shozaburo Jimi said financial mark! ets seem to have received the news of the downgrade with relative calm. ''We should not overreact,'' he said. (Kyodo)
''Today, there was no big impact on markets by this and on this point it was good,'' Kan told reporters in the evening. ''I believe there is still confidence in our country.'' Kan made the remarks a day after S&P cut Japan's long-term sovereign debt rating for the first time since 2002, saying his government ''lacks a coherent strategy'' for reducing its huge debt burden.
Before leaving his office for the Swiss resort of Davos to attend the annual gathering of the World Economic Forum, the premier also said he is well aware of the significance of credit ratings and Japan remains committed to fiscal consolidation.
''When serving as finance minister, I was faced with the Greek debt crisis and reminded of how important fiscal discipline and government bonds are,'' Kan said in a parliament session earlier in the day. ''What is important is maintaining fiscal discipline and market confidence in our country's fiscal management.'' Kan said his government will continue to fix the country's public finances based on its fiscal management strategy mapped out last year, in which it seeks to bring the primary balance -- annual revenues minus outlays other than debt-servicing costs -- back into surplus by fiscal 2020.
Kan was finance chief just before assuming his current post in June and played one of the central roles in crafting the mid- and long-term fiscal restoration strategy.
Hirohisa Fujii, also a former finance minister and currently a deputy government spokesman, said the government must ''humbly accept'' the latest assessment by the U.S. rating agency.
The agency said it does not predict Japan achieving a primary balance before 2020 ''unless a significant fiscal consolid! ation pr ogram is implemented beforehand.'' Some opposition party lawmakers launched verbal attacks on Kan's initial response to the downgrade on Thursday.
When Kan met with the press about an hour after S&P released the downgrade, he said, ''I just heard about the news for the first time...as I am ignorant about this kind of thing, I'd like to talk about it some other time.'' New Komeito party leader Natsuo Yamaguchi criticized Kan for making such a statement without ''a sense of crisis'' as a national leader.
''I couldn't believe what I was hearing,'' Yamaguchi, who heads the second-biggest opposition party, said in an upper house plenary session.
Kan, meanwhile, told Yamaguchi what he had meant by using the word ''ignorant'' was that he did not have information at hand at that time as he was in a Diet session shortly before taking questions from the press.
His Cabinet ministers also defended Kan on Friday, saying his usage of the word ''ignorant'' has been misinterpreted.
Chief Cabinet Secretary Yukio Edano said at a news conference that he confirmed that Kan had not been informed about the downgrade before meeting with the press on Thursday.
Edano also said the downgrade was important information but ''this is an assessment by one private company'' and it was not a matter that needed to be told to Kan as soon as possible, given that there are more urgent issues, such as the fast-spreading outbreak of avian influenza in Japan.
''There is no way that he is ignorant of ratings or issues related to government bonds. I'd like to make this point perfectly clear,'' Finance Minister Yoshihiko Noda said at a news conference.
Kaoru Yosano, economic and fiscal policy minister, told reporters he does not see any problem with Kan's first response, saying he has never heard a national leader abroad making comments each time a rating agency makes an assessment.
Financial Services Minister Shozaburo Jimi said financial mark! ets seem to have received the news of the downgrade with relative calm. ''We should not overreact,'' he said. (Kyodo)
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