Fitch Cuts Japan Debt Rating, Outlook Negative

Japan's sovereign rating was cut by one notch by Fitch on Tuesday as a political stalemate dims the chance that the country can curb its snowballing debt.

Fitch lowered Japan's long-term foreign currency rating to A plus from AA. It cut the local currency ratings to A plus from AA minus. Both were cut with a negative outlook. Fitch warned that further downgrades are possible unless the government takes new fiscal policy measures to stabilize public finances and its ratio of debt to gross domestic product.

The downgrade could serve as a chilling reminder to highly indebted countries in Europe that urgent action is needed to trim public debt and prevent concerns about sovereign debt from weighing further on the global economy. More...