Japan’s long-term foreign and local currency unsolicited sovereign credit ratings were trimmed by one notch to A+ from AA-. Analysts at Standard & Poor’s explain this cut by a worse outlook for Abenomics efficiency. Besides, the country’s GDP growth rates are expected to be slow in the nearest years.
“We believe the likelihood of an economic recovery in Japan strong enough to restore economic support for sovereign creditworthiness commensurate with our previous assessment has diminished. Despite showing initial promise, we believe that the government's economic revival strategy - dubbed Abenomics - will not be able to reverse this deterioration in the next two to three years,” the report of Standard & Poor’s reads.
Credit strategist at Nomura Toshihiro Uomoto, as well as some pundits, supposes that investors will evaluate Abenomics prospects less positively.
“Japan is trying to escape from deflation, but it’s not succeeding. The perception is that the Bank of Japan’s policy isn’t having as much of an impact as it was originally aiming for,” he points out.
