{"id":666593,"date":"2026-10-27T07:08:18","date_gmt":"2026-10-27T07:08:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/666593\/"},"modified":"2026-10-27T07:08:18","modified_gmt":"2026-10-27T07:08:18","slug":"moodys-sees-positive-shift-in-japans-growth-resilience-remains-key-test","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/666593\/","title":{"rendered":"Moody’s sees positive shift in Japan’s growth, resilience remains key test"},"content":{"rendered":"

The rating agency is watching to see if recent changes in Japan\u2019s economic and inflation environment prove sustainable<\/p>\n

Published Tue, Oct 27, 2026 \u00b7 02:15 PM<\/p>\n

[TOKYO] Moody\u2019s sees encouraging signs in Japan\u2019s return to sustained growth and stable inflation, but a key test will be whether that resilience can withstand future shocks, the rating agency\u2019s Japan sovereign analyst told Reuters on Tuesday (Oct 27)<\/p>\n

Moody\u2019s rates Japan at A1, its fifth-highest investment-grade rating, with a stable outlook, unchanged since its 2014 downgrade of Japan from Aa3.<\/p>\n

\u201cWe\u2019re starting to see what looks more like sustained growth and inflation expectations that are reasonably well anchored around 2 per cent,\u201d said Martin Petch, a vice-president at the sovereign risk group of Moody\u2019s Ratings.<\/p>\n

\u201cThat\u2019s been something that\u2019s changed,\u201d Petch said in an interview, referring to a shift from decades of weak growth and chronically low inflation.<\/p>\n

Petch declined to speculate on future rating actions, but said Moody\u2019s was watching to see if recent changes in Japan\u2019s economic and inflation environment prove sustainable, along with reforms that boost productivity and tackle demographic woes.<\/p>\n

A key test, he added, is whether Japan can maintain growth and inflation stability through future economic shocks.<\/p>\n

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\u201cYou can generally tell when growth has become sustained when the economy has dealt with a shock,\u201d Petch said, pointing out that Japan had coped well with recent energy-price shocks while the central bank keeps up efforts to normalise policy.<\/p>\n

Little immediate threat seen to credit profile<\/p>\n

Prime Minister Sanae Takaichi\u2019s food sales tax cut<\/a> and ambitious spending plans<\/a> rattled bond markets this year, but Petch suggested the measures have posed little immediate threat to Japan\u2019s credit profile.<\/p>\n

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Their fiscal impact would depend on whether the government delivered on its pledge to offset the resulting revenue loss, he added.<\/p>\n

Although ministries have sought a record 143 trillion yen (US$908 billion) in initial spending requests, Petch said the rise was relatively modest compared with combined initial and supplementary budgets.<\/p>\n

This reinforced Moody\u2019s view that there has been no meaningful departure from Japan\u2019s recent consolidation trend, he added.<\/p>\n

But uncertainties hover over the government\u2019s 370-trillion-yen public-private investment initiative, Petch said.<\/p>\n

These include the extent to which the private sector joins the initiative, and whether it can bring the productivity gains needed to offset Japan\u2019s demographic headwinds, he added. REUTERS<\/p>\n","protected":false},"excerpt":{"rendered":"The rating agency is watching to see if recent changes in Japan\u2019s economic and inflation environment prove sustainable…\n","protected":false},"author":2,"featured_media":666594,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,64663,113,61,60,582,105354,78179],"class_list":["post-666593","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-credit-ratings","tag-economy","tag-ie","tag-ireland","tag-japan","tag-japan-economy","tag-moodys"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/666593","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=666593"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/666593\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/666594"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=666593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=666593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=666593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}