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 fixed3.63%3.67%
15 yr fixed2.77%2.78%
5/1 ARM2.97%3.05%
30 yr refi3.67%3.71%
15 yr refi2.83%2.84%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,773.64 -57.12 -0.32%
Nasdaq 4,775.36 -29.93 -0.62%
S&P 500 2,065.30 -10.51 -0.51%
Treasuries 1.82 -0.02 -1.03%
Data as of 6:22am ET
Company Price Change % Change
Bank of America Corp... 14.56 -0.23 -1.56%
Freeport-McMoRan Inc... 14.00 1.34 10.58%
Ford Motor Co 13.56 -0.53 -3.76%
Apple Inc 93.74 -1.09 -1.15%
Microsoft Corp 49.87 -0.03 -0.06%
Data as of Apr 29
Sponsors

Sections

The Oracle of Omaha joked that the impact on Corporate America would not be the biggest problem of a Donald Trump presidency. More

The Dow is down 300 points over the past two days, leaving the index on track for its worst week since early February. Blame fumbled earnings reports from the likes of Apple and Google as well as concerns about the Bank of Japan. More

Now you can watch the SpaceX Falcon 9 rocket land on a barge as if you were standing on the deck of the ship. More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More