Latest News

Thursday, 28th January 2010
In Business In Japan,

Japan warned over debt downgrading

The ailing Japanese economy has been dealt another blow with a report from ratings agency Standard & Poor's seeing its debt rating changed from stable to negative.

The move signals a risk that Japan could lose its AA credit rating unless its finances improve and comes as the country continues to struggle with inflation and the impact of its worst recession since the end of the second world war.

According to figures from the Japanese government, by April this year the country could be in debt by as much as £6.7 trillion.

Commenting on the ratings downgrade, Standard & Poor's said it "reflects our view that the Japanese government’s diminishing economic policy flexibility may lead to a downgrade unless measures can be taken to stem fiscal and deflationary pressures".

Japan has suffered with anaemic demand for many of its most popular exports, from gaming products to cars and electrical items such as TVs and computers.

Written by Kimberley Homer.