Japan's diversified and wealthy economy underpins the government's credit standing. Economic growth is likely to return in 2021 as the impact of the pandemic and the October 2019 consumption tax hike subside. The premium placed on consensus in reaching policy decisions often hinders the timeliness of official responses to external and domestic challenges. The free-floating yen's reserve currency status supports Japan's credit quality. Current account surpluses in the next three to four years are likely to augment Japan's extremely strong external financial metrics, despite rising oil and commodity prices. Fiscal deterioration related to COVID-19 will increase its net debt burden to about 165% of GDP this fiscal year, from our estimate of 150% of GDP in fiscal 2019 (ending March
