By Mure Dickie in Tokyo
Published: January 19 2011 14:54 | Last updated: January 20 2011 03:46
Japan has hit a “critical point” where it risks losing investor confidence if politicians fail to reach agreement on how to rein in the ballooning national debt, a cabinet minister has warned.
“We face a dreadful dream that one day the long-term interest rate might rise,” Kaoru Yosano, the new minister for economic and fiscal policy, told the Financial Times.
“So we have to be very careful [to] ensure the credibility of our economy and the credibility of our government.”
His stark comments highlight government determination to introduce a sweeping reform of the tax system that would include a hike in the 5 per cent consumption tax.