TOKYO: Moody's Investors Service changed the outlook on the Japan's Aa2 sovereign rating to negative from stable on Tuesday, warning that government policies may not be enough to rein in the country's huge public debt, according to Reuters. The dollar blipped up against the yen after the announcement, although Japanese government bond futures showed little reaction and maintained earlier gains.
"The rating action was prompted by heightened concern that economic and fiscal policies may not prove strong enough to achieve the government's deficit reduction target and contain the inexorable rise in debt, which already is well above levels in other advanced economies," Moody's said in a statement.
"Although a JGB funding crisis is unlikely in the near to medium term, pressures could build up over the longer term which should be taken into account in the rating, even at this high end of the scale," it said. - Reuters
"The rating action was prompted by heightened concern that economic and fiscal policies may not prove strong enough to achieve the government's deficit reduction target and contain the inexorable rise in debt, which already is well above levels in other advanced economies," Moody's said in a statement.
"Although a JGB funding crisis is unlikely in the near to medium term, pressures could build up over the longer term which should be taken into account in the rating, even at this high end of the scale," it said. - Reuters
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