Fitch downgrades Japan’s credit rateing

Linda Young – Fourth Estate Cooperative Writer

Tokyo, Japan (4E) – Ratings agency Fitch downgraded Japan’s sovereign credit rating Tuesday from an AA to A+ and warned that further downgrades might be necessary.

That is still an investment grade rating, but it is just above the ratings of troubled Italy and Spain.

It was the first time Fitch has downgraded Japan since 2001.

In addition, Fitch criticized Japan for not doing more to get its debt down. The country’s public debt is on target to be nearly 240 percent of gross domestic product by the end of the year.

Japan has the highest ratio of public debt to GDP of any major economy. Moreover, efforts by the government to stimulate the economy have failed to get the debt level down. However, since its debt is held domestically, Japan has not had to pay much to borrow, with its borrowing rates below those of even the United States and Germany.

News of Japan’s downgrade contributed to keeping stock prices lower on markets.

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