Tuesday, August 23, 2011

Moody's downgrades Japan's debt rating to Aa3 from Aa2

Source: NHK World
Date: 8/23/2011 (Wednesday, August 24, 2011 10:22 +0900 (JST))

US credit agency Moody's Investors Service has downgraded Japan's debt by one notch, on concerns over the country's worsening fiscal situation.

Moody's cut Japan's government bond rating on Wednesday to "Double A 3" from "Double A 2".
The new rating ranks Japanese debt at the same level as that of countries like China and Chile.

The agency says it made the downgrade because the effects of the March disaster and resulting power shortages are slowing Japan's economic growth.

It added that the country has failed to hammer out viable plans for reforming its social security and tax system.

Without a clear direction, Moody's says, Japan's economy will deteriorate further.

But the agency notes that Japan has the largest external assets among advanced economies. It says the country will continue to win the trust of the market as long as it manages to improve its fiscal condition.

On the downgrade, Japan's Finance Minister Yoshihiko Noda said he will not comment on a private-sector agency's assessment. But he said that going by recent bond auctions, the market's trust in Japanese government bonds remains firm.