Thursday, January 27, 2011

S&P Lowers Japan's Debt Rating

The world is one big debt bubble.

S&P said it was downgrading Tokyo’s credit rating from AA to AA-minus because it was concerned that Japan’s debt ratio would continue to grow by more than it had previously forecast.

The yen is down sharply against the dollar, euro and primary haven, the Swiss franc. The cost of insuring Japan’s sovereign debt against default is up 5 basis points to 85 basis points. US equivalent credit default swaps are 49 basis points.


  1. I think its time to realize how political this "rating" system is. Japan technically is in a much better place to re-finance its debt compared to the US and Canada and a few other countries (Spain, Ireland, Italy, etc...) who have NOT had their debt rating downgraded (either at all or as much as expected). This seems to be pure political pressure on the Diet rather than reflecting worsening fundamentals. Tell me I'm wrong, please.

  2. Japanese baby boomers are set to retire. 60 is the age where Japan's conglomerates are set up to cast off their old. When that happens, the productivity will fall and bring tax revenue down with it.
    The Japanese government will then have to deal with supporting an even older population while carrying a mountain of debt. At some point, Japan's savers will want to spend their money. It's going to happen at some point or there'd be no point to saving money.

  3. How can Japan have the lower rating than US? That doesn't make any sense... propaganda and b.s. at its finest.

  4. Because Japan is a failing and ageing society with no hope and falling population...Amerika still attracts new tax cattle who are willing to be slaves.