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While the downgrade of Japan’s sovereign rating by Standard & Poor’s is a blow to national pride, at least the world’s third largest economy can take comfort in the fact that it is still seen as more creditworthy than Botswana. In 2002, Moody’s Investors Service infuriated Tokyo by downgrading Japan to one notch below the southern African nation.

The then ruling Liberal Democratic party’s trade minister, Takeo Hiranuma, protested at this “outrageous” comparison with a country he rudely – and inaccurately – described as having a 50 per cent Aids infection rate. Mr Hiranuma later apologised both to Botswana and people living with Aids for his remarks.

Moody’s has so far not signalled any plans to change its current Aa2 rating on Japan, a notch above S&P’s new AA- rating and three above its A2 rating for Botswana.

Still, S&P’s action on Thursday puts Tokyo on the same credit level as neighbouring China, which last year overtook Japan as second largest economy, and also with Beijing’s island rival Taiwan. Fellow recipients of the less-than-coveted AA- ranking include Israel and Kuwait.

The government’s reaction to Thursday’s downgrade was restrained, in part no doubt because S&P’s move supports its argument that fiscal consolidation should be a parliamentary priority.

Mr Hiranuma’s views on the downgrade will count for less this time as the former trade minister is now the leader of the tiny opposition Sunrise party, founded by LDP defectors.

However, Kaoru Yosano, a former LDP economic and fiscal policy minister who helped found the Sunrise party before quitting it to take the same job in the Democratic Party of Japan’s cabinet, was diplomatic. S&P’s move was “regrettable”, Japanese media quoted Mr Yosano as saying, but not entirely without basis.

Copyright The Financial Times Limited 2017. All rights reserved.

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