Japan

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile --Economy recovering with stronger tourism flows --Higher interest rates could slow fiscal repair --Japan's diversified and wealthy economy underpins the government's credit standing. --The free-floating yen's reserve currency status supports Japan's credit quality. --We expect real GDP growth to accelerate to 1.6% in fiscal 2023 (ending March 31, 2024) before moderating to 1% in the next two fiscal years as the population continues to shrink. --Current account surpluses in the next three years should continue to augment Japan's very strong external position. --The premium placed on consensus in reaching policy decisions hinders timely policy responses at times. --Fiscal deficits should narrow over the

...Institutional and economic profile Flexibility and performance profile --Economy recovering with stronger tourism flows --Higher interest rates could slow fiscal repair --Japan's diversified and wealthy economy underpins the government's credit standing. --The free-floating yen's reserve currency status supports Japan's credit quality. --We expect real GDP growth to accelerate to 1.6% in fiscal 2023 (ending March 31, 2024) before moderating to 1% in the next two fiscal years as the population continues to shrink. --Current account surpluses in the next three years should continue to augment Japan's very strong external position. --The premium placed on consensus in reaching policy decisions hinders timely policy responses at times. --Fiscal deficits should narrow over the next three years but remain above pre-pandemic levels. The government's net debt should remain at around 160% of GDP....

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