Standard & Poor lowers rating on Japan

Standard & Poor lowers rating on Japan

Standard & Poor’s on Wednesday lowered Japan’s sovereign debt rating one notch, in the latest sign of concern about Japan’s economic prospects nearly three years after Prime Minister Shinzo Abe took power.

S&P said it was lowering the rating to A-plus from AA-minus because weak economic growth makes it less likely that the government can quickly improve the nation’s fiscal health. “Despite showing initial promise, we believe that the government’s economic revival strategy—dubbed ‘Abenomics’—will not be able to reverse this deterioration in the next two to three years,” S&P said.

Both of S&P’s main competitors,Moody’s Investor Service and Fitch Ratings, have also lowered Japan’s credit rating in the past year. All three cited Japan’s huge government debt—at more than 200% of gross domestic product, the largest among developed nations.

S&P said it expects indebtedness to keep rising, although Japan raised the national sales tax to 8 % from 5 % in April 2014. An aging population gives the country “very weak fiscal attributes.”

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