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Reuters

Standard & Poor's yesterday downgraded Japan's credit rating by one notch to A-plus, saying economic support for the country's sovereign creditworthiness has continued to weaken in the past three to four years.
S&P cut its rating by one notch from AA-minus to A-plus, which is four notches below its top rating AAA. The agency raised its outlook from negative to stable.
It was the first Japan downgrade by S&P since January 2011 and came 41/2 years after it last lowered its outlook from stable to negative.
The downgrade brings its Japan rating into line with rival ratings agency Moody's Investors Service, which downgraded Japan to A1 in December last year. Fitch Ratings cut its rating on Japan to A in April.
The yen shrugged off the lowering of the credit rating. It briefly fell but then regained ground.
"We believe the likelihood of an economic recovery in Japan strong enough to restore economic support for sovereign creditworthiness commensurate with our previous assessment has diminished," S&P said.
It added that "despite showing initial promise, we believe that the government's economic revival strategy will not be able to reverse this deterioration in the next two to three years".
The world's third-largest economy shrank in April-June and analysts expect any rebound in July-September growth to be feeble as private consumption remains sluggish and China's slowdown dampens prospects for a solid recovery in exports.
Japan aims to return to a primary budget surplus in fiscal 2020 and then lowering the debt-gross domestic product ratio, which is the worst in the world at around twice the size of the country's US$5 trillion economy.
The S&P downgrade came the day after the Bank of Japan stood pat on policy.
Bank of Japan governor Haruhiko Kuroda is confident the economy can weather the hit from China's slowdown and weak demand in the rest of Asia, suggesting that he sees no immediate need to expand stimulus further.
But he reiterated the central bank "will not hesitate" to deploy more support if Japan's recovery and the bank's 2 per cent inflation target are threatened.


S&P takes down Japan credit rating to A-plus, raises outlook to stable

Bank of Japan governor Haruhiko Kuroda is confident the economy can weather the hit from China's slowdown and weak demand in the rest of Asia. Photo: EPA

BOJ stands pat, Kuroda says Japan can weather the hit from China slowdown

Haruhiko Kuroda says Beijing has the room and resolve to stabilise its economy with monetary and fiscal measures.Photo: Kyodo

Japan firms stick to spending plans as mood rebounds

Japanese business sentiment has turned positive in the current  quarter. Photo: Reuters

Japan’s Kuroda downplays further dollar gains against yen

Japanese 10,000 yen bank notes are spread out in an office in Tokyo as BOJ governor Haruhiko Kuroda said traders in the foreign exchange market may have already priced in an interest rate hike in the US. Photo: Reuters

Business

Economy

Global Economy

Standard & Poor's yesterday downgraded Japan's credit rating by one notch to A-plus, saying economic support for the country's sovereign creditworthiness has continued to weaken in the past three to four years.
