Tokyo Metropolitan Government

This report does not constitute a rating action. TMG has a strong tax revenue base with a highly diversified economy and has disciplined fiscal management. TMG maintains a strong revenue base as the economic center of Japan. TMG's strong record of revenue and expenditure management demonstrates its fiscal discipline. Ratings on the sovereign constrain those on Japan's LRGs. Prospects of a recovery in TMG's fiscal balance from fiscal 2022 (ending March 31, 2023) will help mitigate a temporary rise in its debt burden. TMG's revenue from corporate-related tax will bottom in fiscal 2020-2021 in line with a moderate economic recovery. Deterioration of debt burden will be temporary thanks to revenue transfer from the central government and a recovery in tax

...Credit context and assumptions Base-case expectations TMG has a strong tax revenue base with a highly diversified economy and has disciplined fiscal management. + TMG maintains a strong revenue base as the economic center of Japan. + TMG's strong record of revenue and expenditure management demonstrates its fiscal discipline. + Ratings on the sovereign constrain those on Japan's LRGs. Prospects of a recovery in TMG's fiscal balance from fiscal 2022 (ending March 31, 2023) will help mitigate a temporary rise in its debt burden. + TMG's revenue from corporate-related tax will bottom in fiscal 2020-2021 in line with a moderate economic recovery. + Deterioration of debt burden will be temporary thanks to revenue transfer from the central government and a recovery in tax revenue. + TMG continues to have exceptional liquidity despite having partly drawn down its reserves....

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