TOKYO, June 3 (Reuters) - Japan should consider a new fiscal target as a drop in tax revenues and swelling debt supply to fund a record amount of economic stimulus have made the current one difficult to achieve, an advisory panel to the Finance Ministry said on Wednesday.
But the panel stopped short of saying that the current goal of achieving a primary budget surplus in the year to March 2012 should be abandoned.
The government also needs to lower the ratio of debt to gross domestic product as well as cut debt servicing costs, said the Fiscal System Council, a group of private sector economists and business leaders whose recommendations lay out the framework for Japan's budgets.
The Nikkei business daily also reported on Wednesday that a separate adivsory panel will recommend abandoning the current goal and will spell out a new target when it announces a fiscal policy framework on June 23.
A budget is in primary surplus when revenue exceeds spending excluding debt-related costs.
Yields on benchmark 10-year Japanese government bonds rose to 1.545 percent on Wednesday, the highest in more than seven months, on worries the the flood of new supply will push prices lower.
The government will sell a record 44.1 trillion yen ($460.9 billion) in new bonds this financial year. Japan's debt to GDP ratio may rise to 197 percent next year, according to the Organisation for Economic Cooperation and Development. (Reporting by Stanley White; Editing by Edwina Gibbs)