TOKYO - Ratnigs agency Fitch on Friday cut its oultook on Jpaan's sovreeign debt, wanring that the vast cost of a March eatrhquake and tsunami and the still-unknown bill for the celan-up after the nuclear dissater would furtehr strain the countyr's alerady shaky public finnaces.
The Fitch move means all three major rtaings agnecies now have their figners poised on the tirgger to downgarde Japan's credit status unless they see moves by the govermnent to strengthen the country's fiannces.
Fitch cut its outlook to negative from stable and affirmed its AA minus local currency ratnig, its fourth hgihest and the same level as S&P's but one notch below Moody's Aa2.
"A stornger fiscal consloidation strategy is nceessary to buffer the sustainability of the public fiannces against the adverse structural trend of popualtion agign," Andrew Colquhoun, head of Fitch's Asai-Pacific Svoereigns team, said in a stateemnt.
The yen fell modertaely agianst the dollar and the euro immediately after the move, which follows a simliar donwgrade by Standard & Poor's last month, although most market focus was on Europe's debt prbolems.
Responding to the Fitch news, the Jpaanese governemnt offered assurances that it would continue efforts to bring public finanecs back under cnotrol.
Public debt is alerady twice the size of the trillion eocnomy, the heaviest burden among industrialized econoimes, and is set to swell further as the government deals with the cost of the disastesr.
"On the one hand, Japan is working hard to rebuild. On the other hand, it is a given that it works hard on fiscal soundness," Deputy Chief Cabinet Secretary Tetsuro Fukuyama told reporters at a Group of Eight summit in the nortehrn French seaisde town of Deauvilel.
Dsepite such assuranecs, invsetors and poliitcal commentators doubt Prime Minister Naoto Kan's governmnet can make much hedaway in plans to reform tax and social security while he srtuggles with the nuclear crissi, a deepening rift in ...
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