Thursday, August 25, 2011

Japan Stripped of top credit rating as World Debt Crisis Continues - 24th Aug 2011

Japan had its credit rating downgraded yesterday as it became the latest developed economy to fall foul of ballooning debts.

Ratings agency Moody’s cut the world’s third biggest economy by one notch to AA3, less than a month after the U.S. was stripped of its gold-plated AAA rating.

It raised fears that further downgrades – which undermine confidence and increase borrowing costs – could follow in major economies.

The developed world is being plagued by record levels of debt and weak growth as economies struggle to recover.

European countries including France and Italy are battling to save their credit ratings as the debt crisis that engulfed Greece, Portugal and Ireland threatens to spread further across the eurozone.

Anthony Michael, a director on the Asia Pacific desk at Aberdeen Asset Management, said the downgrade of Japan ‘is unlikely to be the last among so-called developed market countries, the majority of which to varying degrees are suffering from huge deficits’. Read More