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Japan Credit Oultook Lowered, Deflation Ends
A leading ratings agency has lowered its outlook for Japan’s credit rating due to increasing levels of sovereign debt, while the country’s long streak of deflation came to an end at the beginning of the second quarter, according to Bloomberg.
A leading ratings agency has lowered its outlook for Japans credit rating due to increasing levels of sovereign debt, while the countrys long streak of deflation came to an end at the beginning of the second quarter, according to Bloomberg. On Friday, Fitch Ratings warned, Japans sovereign credit-worthiness is under negative pressure from rising government indebtedness, with the country having a gross government debt of 210% of gross domestic product in 2010. Along with the highest ratio of debt of any Fitch-rated sovereign, the agency said, A stronger fiscal consolidation is necessary to buffer the sustainability of the public finances against the adverse structural trend of population aging.
Meanwhile, a separate report from the Japanese statistics bureau showed that consumer prices excluding fresh food rose by 0.6% year-over-year in April, marking the first annual reading of price inflation since 2008. The gain ends 25 consecutive months of deflation, although economy minister Kaoru Yosano warned that the latest data does not necessarily promise sustained gains. Another government report showed that retail sales dropped 4.8% in Japan in April from one year earlier, underscoring the impact of the Mar. 11 earthquake and tsunami.
Click here to read the story on the credit rating outlook from Bloomberg News.