We believe Japan will maintain stable growth and inflation, with stronger revenue growth helping to meet increased spending. The economy and financial markets have largely adjusted well to higher interest rates, although political and geopolitical tensions could increase economic risks and delay further fiscal repair. We affirmed our 'A+' long-term and 'A-1' short-term foreign currency and local currency sovereign credit ratings on Japan. We revised our transfer and convertibility (T&C) assessment to 'AAA' from 'AA+'. The stable outlook on the long-term ratings reflects our view that nominal GDP growth will remain resilient despite rising risks from economic and geopolitical developments. On March 27, 2025, S&P Global Ratings affirmed its 'A+' long-term and 'A-1' short-term unsolicited sovereign credit ratings on Japan.
