TOKYO (Reuters) - Standard & Poor's doubts Japan's government will compile a fiscal consolidation plan that is detailed enough to ease concerns about how it will reduce budget deficits and the public debt burden, a senior official from the ratings agency said.
Prime Minister Shinzo Abe has delayed a sales tax increase by 18 months, but there are still no guarantees taxes will rise because the political dynamic could change after an election this month, Takahira Ogawa, director of sovereign ratings at the agency, said in an interview.
Japan's government also needs to do more to make social security more sustainable and compile pro-growth strategies, Ogawa said.
Standard & Poor's has an AA- rating on Japan, which is three notches from the top rating of AAA. S&P's rating on Japan has a negative outlook, meaning a downgrade is possible.
Moody's Investors Service on Monday downgraded Japan's sovereign debt rating to A1, one notch below S&P's rating, citing rising uncertainty over the country's ability to hit its debt-reduction goal.