"The downgrades and negative outlooks reflect growing risks for Japan's sovereign credit profile as a result of high and rising public debt ratios"
- Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch
Fitch credit rating agency cut Japan's local currency credit rating by one notch to A plus with a negative outlook from AA minus. It also lowered long-term foreign currency rating to A plus from AA.
The credit rating agency also noted further downgrades are possible unless the government takes new fiscal policy measures to lower its debt to GDP ratio.
"The downgrades and negative outlooks reflect growing risks for Japan's sovereign credit profile as a result of high and rising public debt ratios," Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch said in a statement.
"The country's fiscal consolidation plan looks leisurely, relative even to other fiscally challenged high-income countries, and implementation is subject to political risk."
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