The usual problems relating to debt, plus the immediate ones due to post-earthquake reconstruction, weigh on the decision just taken by the Fitch agency. He revised downwards the sovereign debt rating of the Asian country, lowering it to "negative" from "stable". Fitch, on the other hand, confirmed the long-term rating, with an "AA-" rating.
"Japanese sovereign credit is subjected to negative pressures due to indebtedness" reads Fitch's note, according to which "a substantial fiscal consolidation strategy of public finances is needed to counter the negative structural trend due to population ageing". At the end of 2010, Japan's public debt reached 210% of GDP, the highest level recorded of all debts assessed by Fitch.
But the still unknown costs that the government must bear to contain the effects of the nuclear accident at the Fukushima plant, damaged by the earthquake that struck the area on 11 March, are also weighing on Japanese public finances.
Fitch estimates that the Japanese government will have to increase spending by about 2% of GDP over the next two years to deal with the consequences of the earthquake.
