IMF urges Japan to tackle high public debt

The International Monetary Fund says Japan should place priority on reducing its public debt burden. In its annual report on the Japanese economy, the IMF welcomed the government's plan to raise the consumption tax to 10% by 2015. But it said that won't be enough to put the country's huge fiscal deficits, the highest among industrialized countries, firmly on a downward path. It urged Japan to implement additional fiscal consolidation measures, including raising the consumption tax further to at least 15% like in other industrialized nations, according to (NHK World) website. The IMF also called for measures to reduce Japan's social security spending, including pushing back the minimum age for pension payouts. The IMF expressed concern that although Japan's financial system is currently stable, Japanese banks have put too much money into government bonds. It warns that Japan's financial system and banks are exposed to a spike in yields, and urged it to closely monitor the risk.