TOKYO: Investors are likely to start pulling money from Japanese assets if the government fails to act quickly to reform its tattered finances, the head of the Japan Credit Rating Agency said on Tuesday, Feb 8.
"Japan's fiscal situation is far worse than those of Greece, Spain and Ireland which have been attacked most heavily by markets. If nothing is done, Japan may become a target of investors who want to avoid risk," Makoto Utsumi told Reuters in an interview.
"The government cannot afford to delay taking steps on fiscal reform."
Standard & Poor's cut Japan's rating last month for the first time in nine years to AA-minus, saying it lacks a coherent plan to tackle huge public debt that is twice the size of its GDP, the highest among advanced nations.
Japan Credit Rating Agency, one of the country's two rating agencies, currently has a AAA rating for Japan's sovereign debt -- the highest possible -- because it is confident Japan will not default on its debt, Utsumi said.
But he added: "We are always thinking of how to respond if the current political deadlock proves prolonged, making it hard to predict when the fiscal problems will be resolved."
Utsumi was Japan's vice finance minister for international affairs from 1989. - Reuters
"Japan's fiscal situation is far worse than those of Greece, Spain and Ireland which have been attacked most heavily by markets. If nothing is done, Japan may become a target of investors who want to avoid risk," Makoto Utsumi told Reuters in an interview.
"The government cannot afford to delay taking steps on fiscal reform."
Standard & Poor's cut Japan's rating last month for the first time in nine years to AA-minus, saying it lacks a coherent plan to tackle huge public debt that is twice the size of its GDP, the highest among advanced nations.
Japan Credit Rating Agency, one of the country's two rating agencies, currently has a AAA rating for Japan's sovereign debt -- the highest possible -- because it is confident Japan will not default on its debt, Utsumi said.
But he added: "We are always thinking of how to respond if the current political deadlock proves prolonged, making it hard to predict when the fiscal problems will be resolved."
Utsumi was Japan's vice finance minister for international affairs from 1989. - Reuters
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