Fitch Ratings expects to downgrade Japan’s credit rating sometime early next year as the government is unlikely to compile a budget for next fiscal year that offsets a delay in increasing the sales tax, a senior official from the agency said on Thursday.
Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch, said in a conference call that Japan’s government is also planning to lower the corporate tax, which shows a decreasing chance of lowering the budget deficit.
Fitch is unlikely to consider a downgrade of more than one notch, he said.
Fitch’s rating on Japan is A plus, which is four notches below the top AAA rating. Fitch has Japan on ratings watch negative, meaning a downgrade is possible. Fitch has said it wants to resolve its negative outlook during the first half of next year.
via CNBC
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