Sat, Apr 14, 2018 - Page 11 News List

Japan’s outlook revised by S&P to ‘A+’ long term


S&P Global Ratings yesterday revised Japan’s outlook to “positive” from “stable” as the country’s stronger economy sets the stage for fiscal improvement.

Japan’s formidable external position, its prosperous and strengthening economy, and the yen’s role as a global reserve currency offset weak public finances and adverse demographics, S&P Global Ratings said in a statement.

S&P Global Ratings affirmed its “A+” long-term and “A-1” short-term foreign and local currency unsolicited sovereign credit ratings on Japan.

The positive outlook on the long-term rating reflects Japan’s healthier growth prospects in both real and nominal terms, the rating agency said.

Japan’s sovereign risk is low thanks partly to its large current-account surplus, JPMorgan Securities Japan senior economist Masamichi Adachi said.

The direct impact on Japan of S&P’s change would likely be minimal, Adachi told Bloomberg News, but it would confer some confidence that the government’s policies are having their desired effects.

“This is sort of a message that S&P believes Abenomics is working well,” he said.

An official at the Japanese Ministry of Finance declined to comment on S&P’s latest action, but said Tokyo intends to keep on working to improve its fiscal conditions.

“We understand securing the market’s confidence on Japanese government bonds is an important task,” the offical said.

“We intend to continue working toward fiscal consolidation, while doing our utmost in economic and fiscal management,” the official added.

Japan’s outstanding public debt burden is the worst in the world at more than twice the size of its economy.

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