Quantcast
Monday , August 21 2017
Breaking News
Home / World Business / Moody’s downgrades rating of 5 Japanese banks from Aa3 to A1 over mammoth debt
Moody’s downgrades rating of 5 Japanese banks from Aa3 to A1 over mammoth debt

Moody’s downgrades rating of 5 Japanese banks from Aa3 to A1 over mammoth debt

TOKYO: Moody’s downgraded its credit rating on five Japanese commercial banks today after it downgraded the country’s sovereign debt over concerns about the mammoth national debt, reported AFP.

The firms hit by the move were Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking and Sumitomo Mitsui Banking, as well as regional lenders Shizuoka Bank and Chugoku Bank.

Moody’s said it cut their rating by one notch to A1 with a stable outlook from Aa3, a day after cutting Japan’s rating.

“The downgrade actions follow and are in response to Moody’s downgrade of the Government of Japan’s rating to A1 with a stable outlook from Aa3,” it said in a statement.

“The rating actions reflect Moody’s view that in Japan the capacity of the government to support banks is best measured by its own debt rating of A1.

“Despite these rating actions, Moody’s considers that the willingness of the Japanese government to support major banks continues to be very high.”

The cut to Japan’s rating on Monday put it below neighbours China and South Korea, and on the same level as Israel and the Czech Republic.

The agency cited “rising uncertainty” over the country’s fiscal situation — it has one of the world’s heaviest national debt burdens — and Prime Minister Shinzo Abe’s faltering efforts to kickstart growth, with an election just two weeks away.

Last month Abe announced that a planned sales tax rise set for next year would be delayed, as he called a snap election described as a referendum on his “Abenomics” growth blitz.