This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Nominal growth was steady despite a volatile external environment. Deficits have narrowed on strong revenue growth, but the government's investment plan and external uncertainties can increase spending again. --Japan's diversified and wealthy economy underpins the government's credit standing. --Political and geopolitical pressure to increase spending could raise uncertainties over our forecast period, but the impact on fiscal performance will be partially offset by strong revenue generation. --Persistent yen weakening could undermine economic support for the ratings. --We expect current account surpluses to persist, due to strong income earnings and services imports. --The premium placed on consensus in reaching policy decisions hinders timely policy
