UPDATE 1-Moody's: Japan fiscal target delay is credit negative

* Moody's keeps stable outlook on Japan's Aa3 rating

* Long-term doubts over Japan debt slowly mount

* Japan PM Noda struggling to win support for higher taxes

By Stanley White

TOKYO, Jan 30 (Reuters) - Japan's admission that it will be unable to meet an important target in repairing public finances is negative for the country's rating, Moody's Investors Service said on Monday, a worrying sign as Prime Minister Yoshihiko Noda struggles to win support for higher taxes.

Last week, Japan's government said it would halve the ratio of its primary budget deficit to gross domestic product in 2016, one later than originally planed, as the government has delayed the timing of sales tax hikes.

The government also said it would not meet its target of a primary budget surplus in 2020, admitting that its plan to double the sales tax to 10 percent would not be enough to reduce the debt burden, which is already the worst among major economies.

Moody's said it did not foresee a crisis for the next two to three years, but investors may increasingly question how Japan is going to fund its debt pile after the country ran a rare trade deficit last year and as Europe's debt crisis rages.

"While the projected slippage is small, the disparity could increase ahead of 2015 if economic conditions prove even weaker than the government expects and if budgetary adjustment measures are not taken on a timely basis," Moody's said in a statement.

Moody's rating for Japan is Aa3, three notches below the top rating, with a stable outlook. Standard & Poor's and Fitch also rate Japan at the same level, but both firms have warned that they could downgrade it.

The government originally intended to lower its primary deficit-GDP ratio to 3.2 percent in fiscal 2015/16, which is half of where it was in fiscal 2010/11. This goal will not be reached until fiscal 2016/2017, the government said on Jan. 24.

A primary budget balance excludes debt servicing costs and income from bond sales.

In fiscal 2020/21 the primary deficit will also total 3.0 percent of GDP, the government forecast. That is well short of its target to return to a primary budget surplus, and amounts to an admission that it will have to work harder at fiscal discipline.

Late last year the ruling Democratic Party agreed a timetable for rises in the sales tax, with the first rise not coming until April 2014, six months later than originally planned.

The timetable, revised to appease lawmakers who are reluctant to take the unpopular step of raising taxes, will push up the 5 percent sales tax to 8 percent in April 2014 and then to 10 percent in October 2015.

Passage of the tax hikes is uncertain as Noda's approval ratings have slumped. Noda also needs opposition parties to vote for the bill in a divided parliament, but so far other parties have signalled they will not easily cooperate.

Japan's outstanding debts are nearly twice the size of its $5 trillion economy, a much worse debt burden than any of the countries at the centre of Europe's sovereign debt crisis.