Wednesday, May 20, 2009

Japan lost the maximum credit rating

The debt ratings of Japanese yen and foreign currency were given agency Moody's to the same target - Aa2, reports Bloomberg. This rating for borrowings in foreign currency was reduced to the maximum - Aaa, while the local currency raised from Aa3.

The communication agency indicated that a change in rating reflects the force of the Japanese financial system, notably in foreign exchange reserves at a trillion dollars, and considerable savings of households. On the other hand, stressed that Japan's public debt is very high. According to the forecasts of the Organization for Economic Cooperation and Development, in 2010 it could reach 200 percent of GDP.

The new classification of debts in foreign currency has put Japan on the level of Italy and Hong Kong. Previously, only Italy among the countries of G-7 had a rating below Aaa.

The Japanese government is forced to deploy large numbers of public debt bonds to obtain funds needed to combat the recession in the country. In the current fiscal year ending in March 2010, Japan will sell bonds to 44 trillion yen (about 450 billion dollars). This indicator will record the history of the country.

Japan is stronger than other developed countries suffered because of the global economic crisis, as it has damaged exports, providing a significant portion of GDP. According to government forecasts, the fall in GDP in 2009 will exceed 6 percent. In the first quarter, the economy declined by 16 percent year on year.

Only in the last month in the Japanese economy showed positive signs. For the first six months in the country started industrial production growth, but consumer confidence index rose to a maximum ten.

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