Japan: Monetary tightening threatens debt dynamics in the medium term – Fitch Ratings

Friday’s Fitch ratings from the latest reports suggest that "the rising bond yields with an anticipated monetary tightening policy will make

May 06, 2022 - 11:56 AM 240 views

Japan: Monetary tightening threatens debt dynamics in the medium term – Fitch Ratings

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© Japan: Monetary tightening threatens debt dynamics in the medium term – Fitch Ratings

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Friday’s Fitch ratings from the latest reports suggest that "the rising bond yields with an anticipated monetary tightening policy will make it hard for Japan to decrease its GDP ratio/public debt."

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We do not forecast a sharp increase in the country’s ultra-low interest rates, and Japan’s debt structure should limit the medium-term risks of any debt worries.

By the end of the March 2022 fiscal year (FY21), we forecasted that the general government debt/GDP index would reach 248%, which is the top-notch of any investment grade sovereign. Here, Italy ranks the second highest and is owed by 150%, which is the major credit flaw of Japan.

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