Printer Friendly

Link between Japan gov't, bank ratings invalid: Moody's.

TOKYO, June 10 Kyodo

Moody's Investors Service Inc. said Monday it has stopped assuming Japanese bank ratings will always be linked to Japanese government bond ratings.

Moody's made the announcement following last month's downgrade of its rating on Japanese government bonds by two notches to A2 from Aa3.

The U.S. credit-rating agency said it mentioned the change in the rating assumption in a recently released report entitled ''The Evolving Japanese Bank Rating Approach.''

In the report, Moody's said the Japanese government bond rating ''was, for all practical purposes, a de facto ceiling since the creditworthiness of financial institutions draws heavily from anticipated strong government support.''

As the stability of the Japanese financial system will remain of paramount importance, the Japanese government is likely to utilize its full resources to support the banking system even as it may continue to face domestic debt management challenges, Moody's said.

A downgrade of Japanese government bonds therefore ''would not automatically drive a bank rating downgrade.''

''The key message is that the Japanese government bond rating does not fully capture the government's ability and willingness to extend support to banking institutions,'' Moody's said.
COPYRIGHT 2002 Kyodo News International, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Japan Weekly Monitor
Date:Jun 17, 2002
Words:189
Previous Article:4 killed by fumes at Fukuoka dye factory.
Next Article:METI to enhance grip on arms-related exports.


Related Articles
Kyodo economic news summary -4-.
Kyodo economic news summary -3-.
Kyodo economic news summary -5-.
Kyodo economic news summary -5-.
Kyodo economic news summary -5-.
Kyodo economic news summary -3-.
Kyodo economic news summary -7-.
Kyodo economic news summary -4-.
Kyodo economic news summary -3-.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters