Japanese Debt Downgraded by Fitch; No Urgency for Japan (Until Sudden Panic Hits)

"With Japan's public debt about to hit 240% of GDP, Fitch Downgrades Japan's Sovereign Rating

 The ratings agency Fitch on Tuesday lowered its assessment of Japan’s sovereign credit to A+, an investment grade just above the likes of Spain and Italy, and criticized Tokyo for not doing more to pare down its burgeoning debt.

Japan’s public debt will hit almost 240 percent of its gross domestic product by the end of the year, Fitch warned.

The new rating also heightens the pressure on Prime Minister Yoshihiko Noda to rein in spending and raise taxes at a delicate time, when the Japanese economy is still recovering from natural and nuclear disasters last year.

Mr. Noda has warned that Japan could eventually face a debt crisis akin to that afflicting Europe and is staking his job on a plan to double the consumption tax rate to 10 percent by late 2015. That increase, he has argued, is necessary to pay for soaring welfare costs and pension payments..."

at http://globaleconomicanalysis.blogspot.com/2012/05/japanese-debt-downgraded-by-fitch-no.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29