Moody’s affirms Japan debt rating
TOKYO — Moody’s Investors Service on Tuesday affirmed Japan’s A1 sovereign debt rating and maintained a stable outlook, citing ultra-low funding costs and continued progress in government efforts to reflate the economy.
But the US rating agency warned of the possibility of a credit downgrade if the government fails to achieve meaningful medium-term fiscal consolidation and stabilisation of debt.
“A return of significant deflationary pressures that accompanies a severe loss in economic momentum, or a deterioration in debt affordability due to higher funding pressures would be credit negative,” it said in a statement.
While progress in reflating the economy was not as rapid as originally planned, the government was reining in its huge public debt and pushing through structural reform policies such as labour market reform, Moody’s said.