Moody’s Lowers Japans’ Debt Outlook

Leading ratings agency Moody’s Investors Service has lowered its outlook for Japan’s debt rating from stable to negative over concerns that political disagreements will prevent substantive action on the country’s swelling debt burden, according to Bloomberg.

Leading ratings agency Moody’s Investors Service has lowered its outlook for Japan’s debt rating from stable to negative over concerns that political disagreements will prevent substantive action on the country’s swelling debt burden, according to Bloomberg. On Tuesday, Moody’s warned that the Japan’s economic and fiscal policies “may not prove strong enough to achieve the government’s deficit reduction target and contain the inexorable rise in debt.” The current rating from Moody’s for Japan is Aa2.

The move comes on the heels of rival Standard & Poor’s downgrade of Japan’s rating to the fourth highest level, one notch below Moody’s current rating. Meanwhile, Fitch Ratings reaffirmed its AA- rating for Japan, and confirmed that the outlook for the country remains stable. In the statement, Moody’s said the nation is facing “chronic deflationary pressures,” and warned, “The risks are predominantly on the downside unless there are very good results for the tax reform program and also good results for the government’s efforts to revitalize economic growth.”

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