China and Japan Ratings at Risk
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China and Japan are at risk of credit downgrades, Fitch Ratings warned late Wednesday.
Fitch's Andrew Colquhoun, head of Asia-Pacific sovereign ratings, told Reuters there is a "greater than even chance" of a downgrade of Japan. The analyst also said China could be cut within two years.
Colquhoun cited a significant deterioration in bank asset quality. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards," Colquhoun stated.
Fitch has a AA- rating on China and downgraded its outlook to negative in April.
Japan is at risk due to its massive public debt, which is about twice the size of the economy.
Rival rating agencies Moody’s and Standard & Poor’s have cut their credit rating on Japan already this year.
Fitch's Andrew Colquhoun, head of Asia-Pacific sovereign ratings, told Reuters there is a "greater than even chance" of a downgrade of Japan. The analyst also said China could be cut within two years.
Colquhoun cited a significant deterioration in bank asset quality. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards," Colquhoun stated.
Fitch has a AA- rating on China and downgraded its outlook to negative in April.
Japan is at risk due to its massive public debt, which is about twice the size of the economy.
Rival rating agencies Moody’s and Standard & Poor’s have cut their credit rating on Japan already this year.
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