News / Asia

Japan Reacts to Sovereign Rating Downgrade

Japan's Prime Minister Naoto Kan attends lower house parliamentary session in Tokyo, 27 Jan 2011
Japan's Prime Minister Naoto Kan attends lower house parliamentary session in Tokyo, 27 Jan 2011

Japan's prime minister calls for maintaining fiscal discipline and building market trust in the country's bonds. The remarks follow a downgrade in the country's sovereign debt rating, the latest bit of troubling news for Japan’s long-stagnant economy.

Japan’s prime minister is in damage control mode.

The Standard and Poor’s rating agency has placed Japan on the same risk level as China, reducing its credit rating one notch to AA-. The agency says it made the cut because government lacks “a coherent strategy” for reducing its debt burden.

Prime Minister Naoto Kan commented on the downgrade in an appearance before parliament on Friday.

The prime minister, while offering no new strategies, says it is important to maintain fiscal discipline and win market confidence for Japan’s fiscal management.

Mr. Kan has previously said Japan’s rising social welfare expenses and its soaring national debt make a sales tax increase inevitable.

Opposition lawmakers blasted Mr. Kan, who was previously finance minister, for his initial response Thursday to the downgrade.

The prime minister told reporters he was “not well informed” and could not immediately discuss the downgrade.

Natsuo Yamaguchi, the leader of New Komeito, the third-largest political party, spoke in parliament Friday.

Yamaguchi says he could not believe his ears when he heard the prime minister say he was ignorant about the matter. It is clear, Yamaguchi adds, that Mr. Kan lacks a sense of crisis about the country’s stagnant economy.

The influential Nikkei business newspaper warned on Friday that Mr. Kan’s government needs to demonstrate a plan for tax and social reform to avoid a disaster that could see financial markets spinning out of control.

Market analysts say such action is critical for the world’s third-largest economy. Japan has scant natural resources, and is reliant on exports to fuel its economy. It is struggling to deal with an aging population, but the government has resisted opening the door to immigration, which would replenish the labor pool, especially in service industries.

Industry leaders say the first credit ratings cut for the country in nine years should prod Japan to restructure its budget and reduce spending.

Unlike some countries that have run into serious debt trouble, 95 percent of what Japan owes is held domestically. That makes the economy less vulnerable to the whims of market speculators who have triggered serious financial crises elsewhere.

Japan’s economy has been in decline since the early 1990’s and recently has been beset by deflation. Official comments repeatedly characterize the country’s economy as “pausing.”

The government on Friday announced that while unemployment declined slightly in December, consumer prices also fell for a 22nd consecutive month.


Steve Herman

A veteran journalist, Steven L Herman is the Voice of America Asia correspondent.

You May Like

UN: 1 Million Somalis at Risk of Hunger

Group warns region is in dire need of humanitarian aid, with at least 200,000 children under age of five acutely malnourished as drought hits southern, central part of nation More

Human Rights Groups Allege Supression of Freedoms in Thailand

Thailand’s military, police have suppressed release of independent report assessing human rights in kingdom during first 100 days of latest coup More

Jennifer Lawrence Contacts FBI After Nude Photos Hacked

'Silver Linings Playbook' actress' photos were posted on image-sharing forum 4chan; Federal Bureau of Investigations is looking into matter More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Schools Resume Classes, Donate to Government Forcesi
X
September 02, 2014 12:58 PM
A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Internet, Technology Offer New Tools for Journalists

The Internet and rapidly evolving technology is quickly changing how people receive news and how journalists deliver it. There are now more ways to tell a story than ever before. One school in Los Angeles is teaching the next generation of journalists with the help of a state-of-the-art newsroom. Elizabeth Lee has this report.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.

AppleAndroid