Japan Rating Will Not Change Following Election Promises

Fitch Ratings will not change its sovereign rating on Japan based on promises made by the ruling Liberal Democratic Party ahead of its election victory last month, a Fitch official said on Tuesday.

Andrew Colquhoun, head of Asia-Pacific sovereign rating at Fitch, told reporters on a conference call that the ratings agency would evaluate the actions the new government takes from now.

“We will be looking at Japan’s economic and fiscal strategy as a whole, including any potential revisions to the Bank of Japan’s mandate,” he said.

Prime Minister Shinzo Abe has made reviving the economy his government’s top priority, but his spending promises have raised concerns that Japan’s public debt burden, already the worst among major economies, could deteriorate further.

Colquhoun said that if the new government’s policies were able to foster growth domestic product growth, that could be favourable for Japan’s rating.

Abe has called on the BOJ to take bolder monetary easing measures to beat deflation, and achieve a 2 percent inflation target.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza