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In its latest review report, the US-based Fitch Ratings affirmed Japan’s sovereign credit rating at ‘A’ while maintaining a Negative outlook.

Key takeaways

“Japan’s ratings balance the strengths of an advanced and wealthy economy, with correspondingly robust governance standards and public institutions, against weak medium-term growth prospects and very high public debt.”

“Strong external finances are underpinned by a persistent current account surplus, a large net external creditor position, and the yen’s reserve currency status.”

“Fitch has retained a Negative Outlook on Japan’s ratings, given continued downside risks to the macroeconomic and fiscal outlook from the coronavirus shock.” 

“We expect the BOJ to maintain its current monetary policy settings over the coming year. The BOJ’s policies entail longer-term risks to the central bank’s balance sheet, particularly the purchase of ETFs and fluctuations in underlying equity prices.” 

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