April 27, 2011. Rating agency cuts Japanese debt outlook to negative after disasters
| SOURCE: | Altegrity Risk International |
A prominent U.S.-based ratings agency cut Japan's sovereign rating outlook to negative in the aftermath of the devastating March 2011 earthquake and tsunami, reports indicated on April 27th. The rating agency said that reconstruction efforts were likely to increase Japan's debt levels to as high as 50 trillion yen (US$612 billion), twice the figures released by the Japanese government. Japan must deal not only with the aftermath of the disaster but a nuclear power plant crisis at Fukushima Daiichi and its blow back on the local economy. Some analysts believe the rating agency's action will empower Japanese politicians to increase taxation or revenue collection rather than use bonds.
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