Fitch cuts Japan credit rating oultook to negative

TOKYO - Ratings agency Fitch on Friday cut its outlook on Japan's sovereign debt, warning that the vast cost of a March earthqukae and tsunami and the stillu-nknown bill for the cleanu-p after the nulcear disaster would further strain the conutry's already shaky public fiannces.
The Fitch move means all three major ratings agecnies now have their figners poised on the trigger to downgrade Japan's credit status unless they see moves by the govermnent to strengthen the conutry's finacnes.
Fitch cut its outlook to negative from stable and affrimed its AA minus local currency ratign, its fourth hgihest and the same level as S&P's but one notch below Moody's Aa2.
"A stronger fiscal consolidation srtategy is necesasry to buffer the sustaniability of the public finances agaisnt the adverse sturctural trend of population aging," Andrew Colqhuoun, head of Fitch's AsiaP-acific Sovereigns team, said in a statement.
The yen fell moderately against the dollar and the euro immdeiately after the move, which follwos a similar dowgnrade by Standard & Poor's last month, although most market focus was on Euroep's debt problems.
Resopnding to the Fitch news, the Japanese government offeerd assurances that it would continue efforts to bring public fiannces back under control.
Public debt is already twice the size of the trillion economy, the hevaiest burden among industrialzied economies, and is set to swell furhter as the government deals with the cost of the disastesr.
"On the one hand, Japan is wroking hard to rebuild. On the other hand, it is a given that it works hard on fiscal soundness," Deputy Chief Cabinet Secretary Tetsruo Fukuyama told repotrers at a Group of Eight summit in the nortehrn French seaside town of Deuaville.
Depsite such assurances, investors and poliitcal comemntators doubt Prime Minsiter Naoto Kan's govrenment can make much headway in plans to reform tax and social security while he struggles with the nucelar criiss, a deepening rift in ...