Fitch affirms Japan’s rating at 'A', lowers its Outlook to negative
|The US-based Fitch Ratings, in its latest report, lower the outlook for Japan to negative while maintaining its sovereign rating at ‘A’.
Key quotes
“Projects Japan's economy to contract by 5% for full-year in 2020, before rebounding to 3.2% growth in 2021.”
“Fiscal support & expected recovery in external demand should set the stage for the return to quarterly growth in 2h20 under Fitch's baseline for Japan.”
“Sharply wider fiscal deficits in 2020 and 2021, will add significantly to Japan's public debt.
“Project Japan's deficit to narrow to 10.9% of GDP in 2021 and 5.3% in 2022.”
“Expects BOJ to maintain current interest-rate settings through at least end of 2022 under its yield-curve control framework for Japan.”
Market reaction
USD/JPY is off the lows and back above the 105 level amid a broad dollar bounce and Japan’s Outlook downgrade.
The spot was last seen trading at 105.16, up 0.08% on the day.
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