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Moody's to conclude Japan debt rating review by May 31.

TOKYO, May 14 Kyodo

(EDS: ADDING INFO)

Moody's Investors Service Inc. said Tuesday it plans to announce the results of its three-month review of the Aa3 rating on Japan's sovereign rating by the end of this month.

On Feb. 13, the U.S. credit-rating agency started the review for possible downgrade on the rating of yen-denominated domestic securities issued or guaranteed by the Japanese government.

Moody's said at that time the outcome of the review would be either a confirmation of the Aa3 rating or a downgrade by one or two notches.

Moody's, meanwhile, has sent a response letter to the Finance Ministry, indicating that a downgrading of Japanese government bonds is legitimate because of Japan's massive fiscal deficits, a senior ministry official said.

The letter was in response to one sent late April by the ministry to three Western credit-rating agencies, including Moody's, which questioned the credibility of their rating decisions and asked for further explanations.

''We did not find any persuasive explanations'' in the letter on why Japan's ratings are the same as those for emerging economies, the official said.

He also said there is no new element in the letter.

Earlier this month, Fitch Ratings, a major credit-rating agency, sent a response letter to the ministry, saying its negative ratings on Japanese government bonds reflect Japan's economic fundamentals and that they have been given a negative outlook due to the slow progress of economic structural reforms.
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Publication:Japan Weekly Monitor
Date:May 20, 2002
Words:239
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