S&P threatens Japan downgrade

Standard & Poor's has threatened to cut Japan's government debt rating amid concerns the Government is failing to fix the nation's finances fast enough.

S&P has lowered its outlook on Japan's AA long-term rating from stable to negative and says the ratings could fall by one notch if economic data remain weak and measures to boost medium-term growth are not forthcoming. "The outlook change reflects our view that the Japanese Government's diminishing economic policy flexibility may lead to a downgrade unless measures can be taken to stem fiscal and deflationary pressures," the S&P statement says. "At a forecasted 100% of GDP at fiscal yearend March 31, 2010, Japan's net general government debt burden is among the highest for rated sover...