Moody's cuts debt Japan review

Japanese Finance Minister Yoshihiko Noda speaks at a press conference in his Office in Tokyo on Wednesday. : AFP photo

Agence France-Presse. Tokyo

Moody's rating agency Japan's credit rating to a level downgraded Wednesday, blaming the borrowing- and -round-door policy for the delay of the efforts to the world's largest debt to reduce a build.

Downgrade Japan's bond rating to Aa3 from Aa2 came to the nation due to was his sixth new leader in five years, with Prime Minister see that Naoto Kan disasters resign over his handling of the March of 11.

While expected, the decision by Moody's is pressure continue backup to a political leadership accused a recovery from the effects of 11 March earthquake and tsunami, a rising yen and a slowdown in the global economy.

Moody's also comes after the United States of its top AAA rating by standard & poor's, in the midst of the growing concern for eurozone giants such as Italy and Spain saw cut, and is Japan on a par with China.

Since 2002 was due to the high budget deficits and the rise of the Japanese government debt since the financial crisis, coupled with the lack of long-term planning with it and the prospect of a future weakness of growth, the Agency said its first Japan downgrade.

"In the last five years, frequent changes in the Administration the Government on the implementation of long-term economic and financial strategies in the effective and permanent, prevented", said Moody's.

'11 March earthquake and tsunami and the subsequent disaster at the Fukushima Daiichi nuclear power station have been delayed recovery from the 2009 global recession and difficult deflationary conditions.'

Moody's downgraded some of the country's largest banks, including Mizuho Japan you help Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation, local authorities and other companies following his move to send the Nikkei index 1.07 percent.

Kan described as "regrettable" the downgrading, while finances Yoshihiko Noda minister - a major contender in the race replace Kan - defended the creditworthiness of Japanese bonds.

Noda ' that smooth turnover of Japanese Government bonds at current auctions show that the confidence of solid remains,' told reporters.

Markets offered a limited reaction to the fact that Moody's warned in May that it would be likely to downgrade Japan.

The yen, a post-war high hit 75.95 to the dollar last week, level remained in a narrow range around the 76,60, after the announcement and bond revenues were stable.

"The market response to Moody's downgrade is limited, as the movement was no great surprise," said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.

You say former Foreign Minister Seiji Maehara is considered favorite, to replace kan, but whoever must act quickly, post to Japan - quake to secure recovery while gain the confidence that Japan can cut its debt, analysts.

Japan's debt is around 200 percent of GDP, after years of pump priming measures by Governments, who in vain tried to arrest the economic decline in long.

Much of the spending is deeply through a system of social security on a rapidly aging population engulfed entrenched deflation and the weak economy make it difficult for lawmakers to curb borrowing.

The March disasters, which helped to bring down the economy back into recession and forces the Government to, to borrow more to fund reconstruction.

Japan saw his third directly quarterly contraction in April June, with the economy, which shrink by an annualised 1.3%.

The rise of the yen is now threatening exporters, the ago a slowing global economy the prospect more production abroad to retain competitiveness.

On Wednesday, Noda pledged market more supervision and unveiled a $100 billion-body which help, try the yen after repeated and cool to weaken through market intervention, but the plan underwhelmed markets.

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