UPDATE 1-Japan weighs options to cut budget deficit - Nikkei

April 21 (Reuters) - In an attempt to scale back the nation's huge budget deficit, Japan is considering adopting a new numerical target, with two options now on the table, the Nikkei business daily said.

The new target will be incorporated into a fiscal reform bill being drafted by the government and ruling coalition officials, the daily said.

According to the paper, the target will be expressed as either the primary balance, which shows the degree to which a government can cover its expenditures without issuing bonds, or as the ratio of budget deficit to gross domestic product, a yardstick used by the European Union.

The draft bill targets to halve the primary balance deficit of the central and local governments in fiscal 2015 and achieve a surplus by fiscal 2020, the daily said.

According to the Cabinet Office, the primary balance deficit will come to an estimated 33.5 trillion yen ($362.4 billion) in fiscal 2010, the Nikkei said.

The paper said it was still not known if the legislation will involve the timing and size of any consumption tax hike. (For more stories on the Japanese economy, click [ID:nECONJP]) ($1=92.43 Yen) (Reporting by Vinay Sarawagi in Bangalore; Editing by Maju Samuel)