Monday, 31st January 2011
In Business In Japan,
Japan's credit rating downgraded
Japan's credit rating has been downgraded from AA to AA- by one of the world's largest credit rating agencies.
Moody's has opted to lower the country's credit rating over concerns that there is a higher risk of investing in Japanese bonds.
It is likely that the international markets could react to the downgrading by increase the yield Japan will have to pay on future bond issues and could increase the cost of borrowing within the country - similar to the recent situations seen in the Greek and Irish domestic economies.
Currently, Japan has the largest level of public debt as a proportion of GDP of any industrialised nation, with its overall debt nearly twice that of its GDP.
Standard & Poor's has also announced plans to downgrade Japan's rating to AA- from its current AA level.
Meanwhile, unemployment rate dropped to 4.9 per cent from 5.1 per cent - the first time it has fallen since September.
Written by Susan Ballion.