Fitch affirms Japan with ‘A’ rating, negative outlook
|As per the latest guidance from the global rating giant Fitch, “Japan's long-term foreign currency Issuer Default Rating (IDR) is at 'A' with a negative outlook.”
Key quotes (from Fitch)
Japan's ratings balance the strengths of an advanced and wealthy economy, with correspondingly robust governance standards and public institutions, against weak medium-term growth prospects and very high public debt.
The government's financing capacity is supported by the central bank's monetary strategy, which generates very low-interest rates along the sovereign's yield curve, and the home bias of Japanese private-sector investors.
Fitch has retained a Negative Outlook on Japan's ratings, given uncertainty about the medium-term macroeconomic and fiscal outlook from the continuing pandemic.
Fitch expects growth of 2.5% in 2021 and 3.0% in 2022, as the economy recovers from a 4.6% contraction in 2020. The recovery has been delayed by weak domestic demand owing to coronavirus containment measures, but will continue to be supported by the government's large stimulus measures and a continued strong export and manufacturing performance.
FX reaction
The news fails to impress USD/JPY traders as the quote remains unchanged around 110.40 by the press time.
Read: USD/JPY retreats from 110.80 ahead of US data
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.