Japan to suffer sovereign downgrade this year: experts

Japan to suffer sovereign downgrade this year: experts. February. 06, 2012 05:48. jarrett@donga.com.

The Japanese economy, which has been suffering from a huge national debt for a long time, could see a sovereign downgrade this year, many experts say.

Amid such fears, they warn of the prospects of the yen and Japanese Treasury bonds plummeting. The yen and the bonds have been considered safe assets since the 2008 global financial crisis.

To restore fiscal soundness, Tokyo is mulling measures such as tax reform, but has failed to win over global investors due to poor political leadership. The collapse of the Japanese economy will have a negative impact on the Korean economy through an outflow of Japanese funds, according to experts.

S&P and Fitch presented negative outlooks for Japan`s credit rating last year. S&P said in November last year that the Yoshihiro Noda government failed to come up with measures to cut the fiscal deficit, while Moody`s hinted at a downgrade at the end of last month. Global financial markets expect a downgrade for Japan as early as this month.