Moody’s cut its credit rating on five Japanese commercial banks
Tuesday after it downgraded the country’s sovereign debt over concerns
about the mammoth national debt.
The firms hit by the move were Bank of Tokyo-Mitsubishi UFJ,
Mizuho 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 neighbors 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.
© 2014 AFP
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