Government of Japan: Big companies wage hikes could support consumption, a credit positive, but demand remains fragile

Japan, Government of: Climate transition strategy and financing plans are credit positive, but challenges remain - ESG - Environmental – 2023/11/27 – US$ 750.00 – ...On 8 November, the Government of Japan published the Climate Transition Bond Framework (the framework), the world's first transition bond framework by a sovereign issuer. The implementation of the government's climate transition strategy, financed by the thematic bond issuance, is credit positive, but challenges remain because the plan relies on unproven technologies and lock-in concerns associated with specific projects remain. The use of the proceeds in the framework includes six eligible categories, such as renewable energy, low or zero carbon energy and clean transportation. The framework also incorporates further eligibility criteria, allowing proceeds to be earmarked for projects that are challenging to execute without governmental funding. The framework is an extension of Japan's existing decarbonization strategy, including the Basic Policy for the Realization of GX published in February 2023...

Government of Japan A1 stable: Update following rating affirmation, outlook unchanged - Credit Opinion – 2023/11/09 – US$ 250.00 – ...The credit profile of Japan reflects the long-term challenge of maintaining the world's largest sovereign debt burden amid an aging population and very low potential growth. It also incorporates the large scale and diversity of the economy, its strong external payments position and the high quality of institutions and governance. Amid an acceleration in inflation since early 2022 and the calibration of monetary policy by the Bank of Japan (BOJ) that has led to rising interest rates, although the resulting erosion in debt affordability will be limited given the favorable debt structure. Additionally, robust domestic liquidity and the continued growth of private sector savings underpins the still high debt affordability and mitigate refinancing risks from Japan's very large debt stock. At the same time, high social spending amid population aging, as well as defense needs in the context of geopolitical tensions, challenges prospects for significant debt reduction in the medium term....

Moody's affirms Japan's A1 ratings; maintains stable outlook - Rating Action – 2023/11/08 – US$ 180.00 – Charter Documents - Director and Shareholder Affiliation Policy." Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's...

Moody's affirms Japan's A1 ratings; maintains stable outlook (Japanese translation) - Rating Action – 2023/11/08 – US$ 180.00 – 7/7 (a)(b) Moody's CorporationMCOMoody's Investors Service, Inc. CPMoody's Investors Service, Inc.1,000500 Moody's Investors Service, Inc.MCOMoody's Investors ServiceMoody's Investors ServiceMCO Moody's Investors Service, Inc.MCO5%...

Government of Japan A1 stable: Regular update - Credit Opinion – 2023/06/20 – US$ 250.00 – ...The credit profile of Japan reflects the long-term challenge of maintaining the world's largest sovereign debt burden amid an aging population and very low potential growth. It also incorporates the large scale and diversity of the economy, its strong external payments position and the high quality of institutions and governance. Although the government continues to be publicly committed to medium-term fiscal consolidation, rising social spending amid population aging and near-term inflation, as well as defense needs in the context of geopolitical tensions, has challenged prospects for significant debt reduction. Nevertheless, large private savings underpin very high debt affordability and mitigate refinancing risks....

Government of Japan A1 stable: Update following methodology update - Credit Opinion – 2022/12/16 – US$ 250.00 – ...The credit profile of Japan reflects the long-term challenge of maintaining the world's largest sovereign debt burden amid an aging population and very low potential growth. It also incorporates the large scale and diversity of the economy, its strong external payments position and the high quality of institutions and governance. Although the government continues to be publicly committed to medium-term fiscal consolidation, the pandemic, as well as inflationary pressures, has challenged prospects for significant debt reduction. Large private savings underpin very high debt affordability and mitigate refinancing risks....

Government of Japan - A1 Stable: Annual credit analysis - Issuer In-Depth – 2022/12/14 – US$ 750.00 – ...The credit profile of Japan (A1 stable) balances the country's large, diverse and high-income economy, very strong external payments position and ample domestic savings against its low economic growth and extremely high public debt, which has been pushed up further by the pandemic shock and is likely to remain at similar levels with higher spending to mitigate higher inflation. Although Japan's recovery has lagged those of other advanced economies, the pandemic has not reversed the previous gains from structural reforms, particularly higher labor force participation, which has mitigated the impact of the broader population decline and has continued to improve over the last year. The incumbent government's recent victory in the Upper House elections will allow it to concentrate on its policies to stimulate long- term growth and promote fiscal sustainability over the next few years, although the current difficult macroeconomic environment, including slower global growth and higher inflation,...

Government of Japan: Weak yen does not pose imminent threat to funding - Issuer In-Depth – 2022/10/27 – US$ 750.00 – ...On 20 October 2022, the Japanese yen depreciated to its weakest level against the dollar in more than three decades. The currency's precipitous decline has prompted intervention by Japan's (A1 stable) Ministry of Finance and pushed up longer-term bond yields. While a tightening in funding conditions is credit negative for Japan, we expect a steady flow of investment from high household savings and central bank purchases to contain government funding costs at very affordable levels. + Depreciation pressures likely to ease in 2023, but yen will remain weak. The yen has weakened materially in 2022 on a deteriorating trade balance and widening interest-rate differentials, pushing up inflation and longer-term bond yields and dampening already lackluster domestic demand. In 2023, we expect pressures to lessen as commodity prices soften, supply-chain disruptions ease, tourism picks up, and a likely pause in tightening by the US (Aaa stable) Federal Reserve (Fed) during the year caps interest-rate...

Government of Japan A1 stable: Update following change to forecasts - Credit Opinion – 2022/09/14 – US$ 250.00 – ...The credit profile of Japan reflects the long-term challenge of maintaining the world's largest sovereign debt burden amid an aging population and very low potential growth. It also incorporates the large scale and diversity of the economy, its strong external payments position and the high quality of institutions and governance. Although the government continues to be publicly committed to medium-term fiscal consolidation, the coronavirus pandemic has challenged prospects for significant debt reduction. Large private savings underpin very high debt affordability and mitigate refinancing risks....

Government of Japan: LDP showing in Upper House election paves way for uninterrupted policy work amid significant macro challenges - Issuer Comment – 2022/07/15 – US$ 200.00 – ...On 10 July, Prime Minister Fumio Kishida's Liberal Democratic Party (LDP), along with its coalition partner Komeito, won 76 of the 125 seats being contested in Japan's (A1 stable) Upper House elections. As a result, the coalition increased its majority to 146 out of the Upper House's 248 seats. The coalition's reinforced mandate ¡ following the LDP's victory in Lower House elections in October 2021 ¡ will allow Kishida to concentrate on policymaking until the next round of elections scheduled for 2025, a credit positive. The strong LDP showing has also bolstered the government's approval rating, further underscoring prospects for greater traction on Kishida's reform agenda. The vote came two days after Shinzo Abe, Japan's longest-serving prime minister and head of the largest faction within the LDP, was assassinated while campaigning for a fellow party member. The administration's immediate priorities are to steer the economy out of the COVID-19 pandemic and mitigate the effects of higher...