The island nation’s been hit with a double whammy, the enormous costs of the 11 March 2011 earthquake [including the Fukushima nuclear disaster] combined with the global financial collapse.
Now comes a major downgrade for three of the nation’s banks, and for a chilling reason.
From the London Telegraph:
Fitch has cut the credit rating of three of Japan’s biggest banks over concerns about Tokyo’s ability to support the financial sector, after the nation’s sovereign debt rating was also cut.
The ratings agency lowered its rating by one notch to “A-” from “A” – the seventh highest on a 22-rating scale – for Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group (MHFG), and Sumitomo Mitsui Financial Group.
In the same statement, Fitch said it also lowered its rating for Sumitomo Mitsui Trust Bank to the same level as the major banks, AFP reported
“The downgrade…reflects the government’s weakened financial ability to support the banking system as indicated by the downgrade of [Japan's sovereign rating],” Fitch said in a statement.
With symptoms of decline already evident in China and India and both Obama’s Trans-Pacific Partnership and a European free trade agreement on the table, things are about to get really interesting in Japan.