Fitch Downgrades Japan by One Notch to A

Tokyo, April 27 (Jiji Press)-- Fitch Ratings said Monday it has downgraded its sovereign rating on Japan by one notch to A from A plus, the agency's first downgrade of the rating since May 2012. Japan's long-term foreign and local currency issuer default ratings now stand at the sixth highest on Fitch's scale. The outlook is stable, Fitch said in a press release. Fitch said that "the Japanese government did not include sufficient structural fiscal measures" in its fiscal 2015 budget to replace a deferred consumption tax increase, referring to Japan's decision last autumn to postpone an additional consumption tax hike to April 2017. The rating agency also said that the government's plans to cut corporate tax rates further and launch a supplementary budget for fiscal 2014 "increase Fitch's uncertainty over the degree of political commitment to fiscal consolidation." Among major credit agencies, Moody's Investors Service downgraded Japan's sovereign rating by one notch to the fifth highest A1 last December following the postponement of the additional tax hike. Fitch in the same month placed Japan on a rating watch for a possible downgrade. END