business

Japan downgrades fourth-quarter GDP

6 Comments
By Daniel Leussink and Kaori Kaneko

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6 Comments
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The only product I buy new is food!

Everything else is secondhand...

-1 ( +1 / -2 )

I expect Moody, Fitch, and S&P will downgrade Japan's credit ratings as well as other companies in Japan Inc.

Last time, Moody rated Panasonic, Sony, Mitsubishi Chemicals, and many other Japanese corporations as junk bonds. The act severely hindered Japanese corporations to borrow funds and financialize their assets overseas. Instead of taking criticism, most Japanese corporations announced disregarding Moody's and other Big Three credit rating agencies for the adoption of the domestic credit rating agencies. As the result, we see very few Japanese corporations massively expanded overseas with the exception of Keiretsus. Because Japan's declining creditworthiness severely hurts any chance for any Japanese business overseas since you need to borrow money and have access to good financial services to do businesses outside of your country.

6 ( +6 / -0 )

@Septim Dynasty last time i checked, these 3 big credit rating agencies were responsible for the global financial crisis as they rated dogshit bonds AAA.

1 ( +2 / -1 )

@Sindhoor GK

Those agencies still hold a lot of power if your companies are doing business overseas. The credit they give matters. Even if Japanese companies don't care, They will be affected in a negative way.

1 ( +1 / -0 )

I expect Moody, Fitch, and S&P will downgrade Japan's credit ratings as well as other companies in Japan Inc.

NoT surprising. These morons whose incompetence helped cause the global financial crisis clearly don't know that nearly half of Japan's national "debt" is being held by the Bank of Japan, a public sector institution. Someone please tell them. These Einsteins havent noticed that Japan has absolutely no problem issuing its own "debt" in its own currency to mostly its own institutions.

0 ( +0 / -0 )

@Septim Dynasty last time i checked, these 3 big credit rating agencies were responsible for the global financial crisis as they rated dogshit bonds AAA.

They still have power. Even the US government couldn't sway them at all!

Last time, one of them downgraded the US bonds during the 2009 Great Recession. The US government sued that company but the credit rating agency did not back down and ultimately won.

Corporations have an equivalent power against the government. Only in America.

These Einsteins havent noticed that Japan has absolutely no problem issuing its own "debt" in its own currency to mostly its own institutions.

As long the USD supremacy exists, your statement is irrelevant. There is a particular reason why Japan hasn't forgiven its own debts: Credit rating agencies.

You must need the USD to do international business. Of course, you also need to have credits to borrow the USD as well. Abandoning the obligation to pay your debts is a ticket for Japan to straight back into a poor country, in terms of credit ratings of course.

Even if Japanese companies don't care, They will be affected in a negative way.

In an extremely negative way. The very reason why you see very few Japanese corporations around the world anymore because the 1990s assets bubble crash destroyed the credit ratings of almost every big Japanese corporation. However, the remaining big ones, like Toyota to Nomura, are alive due to the ceding of shareholder controls to foreigners - these foreigners negotiate with banks, financial institutions, and credit rating agencies to keep Keiretsus alive. Still, most profitable Japanese companies are today in dangerous water as they dangle between A and BBB+ which is very close to being classified as junk bonds.

0 ( +0 / -0 )

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