S&P Raises Japan's Outlook to Positive on Stronger GrowthBy
Standard & Poor’s raised its outlook for Japan to positive from stable, citing healthier economic growth prospects, the credit-rating company said on Friday.
Nominal growth exceeding 2 percent and negative effective real interest rates would enable relative debt to stabilize sooner than previously anticipated, S&P said. The outlook could return to stable if growth is weaker than expected and fiscal consolidation slows, it said.
Japan’s sovereign risk is low thanks partly to its large current-account surplus, according to Masamichi Adachi, senior economist at JPMorgan Securities Japan.
The direct impact on Japan of S&P’s change would likely be minimal, Adachi said, but it would confer some confidence that the government’s policies are having their desired effects. "This is sort of a message that S&P believes Abenomics is working well," he said.