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 fixed3.92%3.92%
15 yr fixed2.99%2.98%
5/1 ARM3.26%3.12%
30 yr refi4.01%3.98%
15 yr refi3.08%3.04%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 17,798.49 -14.90 -0.08%
Nasdaq 5,127.53 11.38 0.22%
S&P 500 2,090.11 1.24 0.06%
Treasuries 2.22 -0.01 -0.31%
Data as of 6:30am ET
Company Price Change % Change
General Electric Co 30.36 0.00 0.00%
Bank of America Corp... 17.48 0.04 0.23%
HP Inc 12.61 -0.03 -0.24%
Pfizer Inc 32.79 -0.08 -0.24%
Walt Disney Co 115.13 -3.54 -2.98%
Data as of Nov 27


Sumner Redstone, the media mogul who controls Viacom and CBS, is at the center of a legal dispute. One side says he is practically unable to make decisions for himself. The other says he is "engaged and attentive." More

Gold futures hit a low of $1,051.60 an ounce, yet another reminder of just how out of favor gold has become since its all-time high of nearly $1,890 in 2011. More

Watsi crowdfunds donations to cover healthcare costs of those in need. And it's seeing a surprising trend: micro-donations via the popular Chinese social networking app, WeChat. More

Hive, a startup funded by the UN, is tasked with getting more Americans engaged with the refugee crisis. More

Facebook just increased the amount of paid time off new dads working at its international offices can take. More