Japan’s sovereign debt rating cut

| August 24, 2011
Japan's sovereign debt rating cut

Moody’s has lowered the government debt rating of Japan to Aa3 with a stable outlook, from Aa2.

The credit rating agency has also taken action on the ratings of most Japanese banks, including Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corporation, with the average downgrade one notch.

According to Moody’s, the sovereign downgrade has been prompted by the country’s large budget deficit and the build-up in Japanese government debt since the 2009 global recession.

The firm also acknowledges that Japan’s catastrophic earthquake earlier this year has undermined recovery.

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