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2011-08-24
Moody's Cuts Japan's Credit Rating
By WILLIAM SPOSATO

TOKYO—Moody's Investors Service lowered Japan's credit rating, making the country the latest to be hit in the latest round of sovereign-debt downgrades.

The move, announced early Wednesday, puts fresh pressure on the country's political leaders to repair its finances, considered by observers to be among the worst in the industrialized world.

Moody's said it was cutting Japan's government bond rating to Aa3 from Aa2, citing the "large budget deficits and the build-up in Japanese government debt since the 2009 global recession." It said the outlook was stable.

The action puts Moody's rating on a par with other major ratings companies Standard & Poor's and Fitch Ratings, both of which rate Japan's sovereign debt at double-A-minus with a negative outlook.

Moody's last changed Japan's rating in May 2009, when it raised it from Aa3. As Japan's fiscal position worsened this year, it lowered the outlook to negative on Feb. 22 and announced a review for possible downgrade on May 31.

The downgrade, made a little more than five months after the country suffered an earthquake, tsunami and nuclear crisis, comes less than a week before Japan is to select a new prime minister after a string of leaders who have lasted little more than a year.

Like the U.S., Japan is facing increasing criticism over its financial condition, bringing action from the ratings companies.

But its finances are in far worse shape with nearly half of the annual central government budget financed by bond issuance and the gross debt now equal to more than 200% of annual GDP. That compares with a U.S. debt load at an estimated 75% of GDP.

In addition, Japan is facing some 15 trillion yen to 20 trillion yen in spending to recover from the March 11 earthquake and tsunami in the Northeast of the country.

Still, a downgrade is unlikely to have the same dramatic market impact seen with the recent U.S. debt downgrade, or the repeated downgrades in Europe. Japan has already had repeated downgrades, first losing its Aaa Moody's rating in 1998. Also, with Japanese debt largely held domestically, its government bonds have to date been largely impervious to dramatic swings in investor sentiment.

And despite the size of the debt load, some political leaders remain reluctant to support for now any measures needed to curb borrowing—such as tax increases—saying it could undermine a fragile economic recovery.

Among those calling for more aggressive action to curb the debt are Finance Minister Yoshihiko Noda, who is now one of the top candidates to replace Naoto Kan as prime minister.

But other candidates for the race have been less clear-cut and the prospects for a tax increase remain uncertain.

Such a move would likely focus on raising the current 5% consumption tax, possibly to 10% or 15%. But such a move would still leave large deficits in place that would be needed to be offset by either spending cuts or additional levys. The current government plan in any case envisages no increase until sometime around 2015.

Increasing that gulf, private and public-sector forecasts have lowered Japan's expected growth rate. The government said earlier this month that it expects gross domestic product to grow just 0.5% in the current fiscal year with an increase to a 2.7%-2.9% rate for the following fiscal year.

Write to William Sposato at william.sposato@dowjones.com

Source: http://online.wsj.com/article/SB10001424053111903461304576527013194461004.html?mod=WSJASIA_hpp_LEFTTopWhatNews


ps:可能还有朋友还不熟悉follow me 是个什么活动,下面是版主总结的关于这个活动的帖子,欢迎大家加入进来,共同学习讨论:https://bbs.pinggu.org/thread-1130480-1-1.html
还有助理的一些感想:https://bbs.pinggu.org/thread-1139059-1-1.html   
另外下面是历期的汇总的文章,欢迎大家下载阅读:https://bbs.pinggu.org/thread-1130105-1-1.html


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2011-8-24 09:03:56
欢迎大家为Happylife87评分哈
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2011-8-24 09:27:56
Moody's Investors Service cut its rating to Aa3 from Aa2 due to heightened concerns about its faltering growth prospects and a weak policy response to deal with bulging public debt,Japan's finances maybel continue worsening,but there  is not a lot of influence to china stock,my shares return   rate  is up to 3% today


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2011-8-24 10:47:58

Coming events cast their shadows them
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2011-8-24 10:51:14
wusi126 发表于 2011-8-24 09:27
占位一下
嘿嘿,还是被我抢先了
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2011-8-24 11:02:17
It's somewhat like hit a man when he is down. While the negative outlook is really becoming a common view.
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