Moody's Urges Japan to Maintain Fiscal Reform Amid Gradual Rate Hikes

Analyst states missing the 2025 budget target won't affect Japan's credit rating if reform commitment persists.

Moody's does not expect Japan to meet its fiscal 2025 primary budget-balancing target.
Failure to meet the target will not trigger a negative rating action if reform commitments are maintained.
The Bank of Japan is expected to take a gradual approach to normalizing interest rates.
Japan's public borrowing exceeds twice the size of its economy, the highest among industrialized nations.
Fiscal reform has become urgent since the end of Japan's negative interest rate policy in March.