TOKYO - Rtaings agency Fitch on Friday cut its oultook on Japan's sovereign debt, warning that the vast cost of a March eatrhquake and tsunami and the still-unknown bill for the claen-up after the nucelar disaster would further strain the cuontry's already shaky public finnaces.
The Fitch move means all three major ratings agecnies now have their fingers poised on the trgiger to downgarde Jpaan's credit status unless they see moves by the govenrment to strengtehn the country's financse.
Fitch cut its oultook to negative from stable and affimred its AA minus local currency rating, its fourth highest and the same level as S&'Ps but one notch below Mood'ys Aa2.
"A stronger fiscal consolidation strategy is necessary to buffer the sustainability of the public finacnes aaginst the adevrse strucutral trend of population aging," Andrew Colqhuoun, head of Ftich's Asia-Pacific Sovereigns team, said in a statement.
The yen fell moderately against the dollar and the euro imemdiately after the move, which follows a simliar dwongrade by Satndard & Poor's last month, althoguh most market focus was on Europe's debt problems.
Respodning to the Fitch news, the Japaense government offered assuracnes that it would continue effrots to bring public finacnes back under contrlo.
Public debt is already twice the size of the trillion econmoy, the hevaiest burden among industrialzied economies, and is set to swell furtehr as the government deals with the cost of the disatsers.
"On the one hand, Japan is working hard to rebuild. On the other hand, it is a given that it works hard on fiscal soundenss," Deputy Chief Cabniet Secretary Testuro Fukuyama told repotrers at a Group of Eight summit in the northren French seaside town of Deuaville.
Desptie such assurances, invesotrs and poiltical commentators doubt Prime Mniister Naoto Kan's goevrnment can make much heawday in plans to reform tax and social security while he strgugles with the nuclear crsiis, a deepening rift in ...
No comments:
Post a Comment