HALISTER1: S&P Says Japan Will Have ‘Material Fiscal Deficits’ Through 2020

S&P Says Japan Will Have ‘Material Fiscal Deficits’ Through 2020

(Bloomberg) -- S&P Global Ratings is assuming Japan will have “material fiscal deficits” through 2020 and any improvements will only be gradual over the next few years.
  • While fiscal policy is important, govt and BOJ’s ability to support economic growth and spur positive inflation will have a major bearing on fiscal outlook, Sovereign Analyst Craig Michaels says in response to email questions from Bloomberg
    • Economic growth is currently sound, but S&P is yet to see evidence that wages and inflation are going to pick up sustainably
  • Japan’s 5-year credit-default swap has climbed to 41bps, highest since June 2016, from 31bps at the end of last month amid concern the country’s credit rating may be cut
    • Prime Minister Abe said on Monday it’s become difficult to meet target of achieving primary balance surplus by fiscal 2020
    • S&P has A+ rating for Japan’s long-term debt with stable outlook
To contact the reporter on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Nicholas Reynolds

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Craig Michaels (Standard & Poor's Financial Services LLC)

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