S&P downgrades Japan credit rating to AA

27 Jan 2011 - {{hitsCtrl.values.hits}}

Standard & Poor's on Thursday lowered Japan's long-term sovereign credit rating to AA minus from AA, saying it expected the country's fiscal deficits to stay high in coming years.

"The downgrade reflects our appraisal that Japan's government debt ratios -- already among the highest for rated sovereigns -- will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s," the agency said.

"In our opinion, the Democratic Party of Japan-led government lacks a coherent strategy to address these negative aspects of the country's debt dynamics," it said in the release.

The AA minus rating is the fourth highest in terms of quality on a scale of 22.

On Monday Prime Minister Naoto Kan said his government was working towards drafting a basic proposal by the end of June on overhauling the nation's tax and social security systems.

Japan's public debt is the industrialised world's biggest, at twice the size of the $5 trillion economy, with the welfare costs and revenue shortfall associated with a rapidly greying population adding further pressure.

The yen fell sharply against the dollar following the announcement, to 83.20 yen from around 82.12 yen in earlier trade before recovering back to the high 82 yen level. (AFP)

Economy

S&P downgrades Japan credit rating to AA

Most Popular Articles

LAUGFS gas prices remain unchanged

CSE slides sharply as Middle East tensions trigger broad-based selling

CSE rebounds as lower oil prices and strong crossings lift sentiment

CSE surges as peace deal optimism sparks broad-based rally

CSE ends week on a soft note as early gains fade amid cautious Friday profit-taking

CSE extends decline as middle east concerns weigh on investor confidence

Latest News

Hamilton wins first grand prix for Ferrari as Antonelli retires

Refugee-Turned-Star Irankunda delivers

Modified Dengue strain driving surge in cases: Health Ministry

Over 5,000 Bharatanatyam dancers in Colombo clinch Guinness World record

Court allows Tissa to seek answers from Prime Minister