Japan faces downgrade in credit rating

This article first
appeared on PressTV

Fitch puts Japan credit on Rating Watch Negative

TokyoCredit rating agency, Fitch, has placed Japan sovereign credit on Rating Watch Negative (RWN), just days before snap elections in the country.

The rating agency said in a statement released on Tuesday that Japanese Prime Minister Shinzo Abe’s decision to delay the implementation of a sales tax from 2015 to 2017 raised “doubts over the authorities’ commitment to the objective of fiscal consolidation.”

The rating firm said the 18-month delay shows it will be nearly impossible to achieve the government’s previously-stated goal of reducing the primary budget deficit to 3.3 percent of gross domestic product by March 2016.

It warned that Tokyo would meet a negative sensitivity identified in the May 2014 credit review “unless broadly equivalent and permanent fiscal measures are announced in the forthcoming budget.”

Last week, Moody’s credit rating agency downgraded Japan’s credit rating, citing “rising uncertainty” over the country’s debt situation. [Japanese have been forced into this corporate system and they have no options at this point to opt out of this corporate system]

The vote for the lower house of parliament on December 14 is thought to be a referendum on Abe’s economic policies.

Over the past two years, Abe has pressed ahead with pro-spending policies to boost the economy.

The stimulus policies, called “Abenomics,” have boosted stock prices and pushed the yen down. [the Japanese Yen went from ¥100 to ¥120 per one U.S. Dollar in about three weeks – December 10, 2014 – after the Yen was around ¥100 per one U.S. Dollar for four years]

Although Japan left its latest recession in 2012 and experienced a fairly strong growth in 2013, Japan has one of the heaviest debt burdens among rich nations.