Fitch downgrades Japan citing economic concerns - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Fitch downgrades Japan citing economic concerns

Posted:

By The Associated Press

Fitch Ratings has lowered Japan's credit rating as the country continues to wrestle with staggering debt.

Fitch said Monday that the government did not include sufficient measures in its budget to replace a sales tax hike it put off in the current fiscal year, which ends next March.

Japan's debt is the largest among developed nations and more than twice the size of its economy. The country eventually has to boost taxes to cover rising costs for health and elder care as the average age in the nation rises. But a sales tax increase last spring hurt consumer and business spending as the Japanese economy slipped into a recession.

That led Prime Minister Shinzo Abe to put off a second, planned hike, illustrating the tough position in which government leaders have found themselves.

Fitch said Monday that Japan's main credit and rating weakness is due to its high and rising level of government debt. The ratings agency noted that the government has already cut corporate tax rates and plans to do so again in fiscal 2016.

"These developments increase Fitch's uncertainty over the degree of political commitment to fiscal consolidation," Fitch said, noting that Japan is set to unveil a new fiscal strategy this summer. "The details of the strategy will be important, but the strength of the government's commitment to implement it will be even more important and will only become clearer over time."

Fitch downgraded Japan's long-term foreign and local currency issuer default ratings to "A'' from "A+." It also lowered its senior unsecured foreign and local currency bonds ratings to "A'' from "A+."

Fitch said that strong credit fundamentals like a high-income, wealthy economy and social and political stability support Japan's ratings.

Most of Japan's public debt is held by the Bank of Japan and other Japanese financial institutions, so it is considered relatively stable.

  • Business NewsMore>>

  • 16 Mile Brewery Shuts Down

    16 Mile Brewery Shuts Down

    Monday, September 24 2018 4:45 PM EDT2018-09-24 20:45:11 GMT
    Tuesday, September 25 2018 7:45 AM EDT2018-09-25 11:45:03 GMT
    GEORGETOWN, Del.- After speculation late last week, 16 Mile Brewery has officially closed its doors. On Monday, the local brewery's LED sign on Bedford Street read "Thank you for a great decade." The brewery's doors were locked, the lights off, and a signMore
    GEORGETOWN, Del.- After speculation late last week, 16 Mile Brewery has officially closed its doors. On Monday, the local brewery's LED sign on Bedford Street read "Thank you for a great decade." The brewery's doors were locked, the lights off, and a signMore
  • Perdue Activates Carolinas Disaster Relief Effort

    Perdue Activates Carolinas Disaster Relief Effort

    Thursday, September 20 2018 10:10 AM EDT2018-09-20 14:10:07 GMT
    Thursday, September 20 2018 10:20 AM EDT2018-09-20 14:20:53 GMT
    Perdue Farms is sending truckloads of food and the Perdue Chicken Food Truck to the Carolinas in response to historic flooding caused by Hurricane Florence.More
    Perdue Farms is sending truckloads of food and the Perdue Chicken Food Truck to the Carolinas in response to historic flooding caused by Hurricane Florence. More
  • Delaware Signs Final Port of Wilmington Privatization Deal

    Delaware Signs Final Port of Wilmington Privatization Deal

    Sep 19, 2018 9:22 AM -04:002018-09-19 13:22:00 GMT
    Wednesday, September 19 2018 9:22 AM EDT2018-09-19 13:22:38 GMT
    The Port of Wilmington (Photo: Creative Commons)The Port of Wilmington (Photo: Creative Commons)
    The Port of Wilmington (Photo: Creative Commons)The Port of Wilmington (Photo: Creative Commons)
    Delaware has signed a final agreement with a private Emirati port operator to privatize the Port of Wilmington.More
    Delaware has signed a final agreement with a private Emirati port operator to privatize the Port of Wilmington.    More
Powered by Frankly

All content © Copyright 2000 - 2018 WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices