Rating agencies respond cautiously to Japan's disasters

For the time being at least, the three main rating agencies are taking a sanguine view of Japan's sovereign and corporate debt, but warn that it is too early to make a judgment.

The massive earthquake and tsunami that hit northeastern Japan on March 11, and the continued destructive threat posed by the worsening failures at the Fukushima nuclear power plant, have provoked a cautious response from the three leading credit rating agencies.

Standard Poor’s says it is too early to judge the implications for Japan’s AA- sovereign credit rating. Much will depend on the “overall macroeconomic impact of the earthquake, the pace and duration of reconstruction, and the impact on fiscal deficits”, said SP’s credit analyst Takahira Ogawa on March 15. The greatest uncertainty relates to the country’s safe shutdown of its nuclear reactors and its future energy supply....

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