Japan’s credit rating cut as economy contracts
Standard and Poor’s downgraded Japan’s sovereign debt rating on Wednesday from AA- to A+ due to growing concerns over the Japanese economy. It is the third such move by the global credit ratings agencies, following similar ones by Fitch in April and Moody’s in December.
The downgrades demonstrate the financial markets’ dissatisfaction with the failure of Prime Minister Shinzo Abe’s “Abenomics” to halt Japan’s protracted slump. After taking office in December 2012, Abe claimed that his “three arrows” economic plan would boost growth in Japan’s stagnant economy.
In the latest blow to Abe, his government announced last month that Japan’s economy had shrunk in the second quarter of 2015 by 1.6 percent on an annualized basis.
“We believe that the government’s economic revival strategy—dubbed ‘Abenomics’—will not be able to reverse this deterioration in the next two to three years,” S&P stated. “Economic support for Japan’s sovereign creditworthiness has continued to weaken.”
Read more: https://www.wsws.org/en/articles/2015/09/18/japa-s18.html
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