Key facts
- Moody's rates Japan A1 with a stable outlook.
- Japan has coped well with recent energy-price shocks.
- Uncertainties hover over the government's 370-trillion-yen public-private investment initiative.
Moody's sees encouraging signs of sustained growth and inflation expectations around 2% in Japan, but believes resilience to future economic shocks will be a key test for the nation's credit profile. The rating agency, which rates Japan A1 with a stable outlook, noted that Japan has coped well with recent energy-price shocks. Analyst Martin Petch suggested that Prime Minister Sanae Takaichi's proposed tax cut and spending plans pose little immediate threat to Japan's credit profile, though their fiscal impact depends on the government's ability to offset revenue losses. Moody's also noted uncertainties surrounding a 370-trillion-yen public-private investment initiative.