Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

S&P downgrades Japan's outlook to 'negative'

By Aaron Smith, staff writer


NEW YORK (CNNMoney) -- Standard & Poor's has revised Japan's credit rating outlook to "negative," blaming the crisis triggered by last month's earthquake.

S&P said late Tuesday that its revision to the nation's outlook, to "negative" from "stable," reflects the possibility of a downgrade, as Japan grapples with the specter of increased deficits in the wake of a deadly earthquake, tsunami and nuclear power plant disaster.

"Standard & Poor's expects costs related to the March 11, 2011, earthquake, tsunami, and nuclear power plant disaster will increase Japan's fiscal deficits above prior estimates by a cumulative 3.7% of GDP through 2013," said the rating agency.

The rating agency also said its revision to the outlook was "to reflect the potential for a downgrade if fiscal deterioration materially exceeds these estimates in the absence of greater fiscal consolidation."

S&P affirmed its long-term sovereign credit ratings for the country at AA- and short-term ratings at A-1+.

"Much will depend on Japan's political leadership and its ability to forge a political consensus on how to offset fiscal measures in the future," said S&P. "The extent of environmental contamination in northeastern Japan remains unknown."

S&P estimated that Japan's reconstruction could cost the country ¥30 trillion, which is equal to about $364 billion.

Japan isn't alone. On April 18, S&P lowered the outlook for the United States  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.01%4.05%
15 yr fixed3.19%3.23%
5/1 ARM3.17%3.26%
30 yr refi4.01%4.07%
15 yr refi3.19%3.24%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 20,701.50 150.52 0.73%
Nasdaq 5,875.14 34.77 0.60%
S&P 500 2,358.57 16.98 0.73%
Treasuries 2.41 0.04 1.52%
Data as of 6:03am ET
Company Price Change % Change
Bank of America Corp... 23.48 0.45 1.95%
Ford Motor Co 11.65 0.19 1.66%
Chesapeake Energy Co... 5.39 0.23 4.46%
Advanced Micro Devic... 13.69 -0.02 -0.11%
Apple Inc 143.80 2.92 2.07%
Data as of Mar 28
Sponsors

Sections

Troubled U.S. nuclear business Westinghouse Electric is filing for bankruptcy protection, its Japanese owner Toshiba said Wednesday. More

The House voted to repeal Internet privacy protections. The future of online privacy is now in President Trump's hands. More