S&P Cuts Outlook on Japan

Politics Economy

Tokyo, June 9 (Jiji Press)--S&P Global Ratings said Tuesday that it has cut its outlook on Japan to stable from positive, citing increased uncertainty about the country's fiscal health after coronavirus stimulus measures.

The major rating agency affirmed its A-plus long-term and A-1 short-term sovereign credit ratings on Japan.

S&P said that the Japanese government's fiscal 2020 second supplementary budget, now under deliberation at parliament, will boost the ratio of outstanding debts to gross domestic product to 171 pct from 151 pct in fiscal 2019.

Even if the coronavirus pandemic is brought under control, Japan's fiscal deficits will remain at high levels over the next two to three years because the government is expected to maintain some support for the economy, S&P said.

"We may lower the ratings on Japan if structural changes lead economic growth to stay persistently below other high-income economies and a return of deflation puts long-term pressure on fiscal performance," S&P said.

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