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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.95%3.94%
15 yr fixed3.05%3.02%
5/1 ARM3.34%3.48%
30 yr refi4.02%4.01%
15 yr refi3.13%3.10%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,941.84 -193.88 -1.07%
Nasdaq 4,941.47 -41.34 -0.83%
S&P 500 2,079.90 -21.14 -1.01%
Treasuries 2.24 0.13 6.11%
Data as of 11:53am ET
Company Price Change % Change
Bank of America Corp... 16.38 0.38 2.34%
Apple Inc 127.72 1.31 1.04%
Citigroup Inc 53.21 -0.35 -0.65%
AT&T Inc 33.45 -0.55 -1.62%
Chesapeake Energy Co... 15.66 -0.26 -1.63%
Data as of 11:38am ET
Sponsors

Sections

The band Hall & Oates charges copyright infringement against granola maker; besides it already has a deal to use that name on brand of oatmeal. More

The U.S. added 295,000 jobs in February and unemployment fell to 5.5%, the lowest level since May 2008. More

Frank & Oak, Airbnb, and Net-a-Porter are just a couple of companies investing in the antiquated medium. More

There's no end to the creative ways scammers will try to steal your identity and your money. And tax time is one of their favorite times of the year. Here's how to spot a top scam and protect yourself. More