Japan's outlook revised to negative by S&P, keeps AA rating

[Down Under]

Re: Japan's outlook revised to negative by S&P, keeps AA rating

iTulip has gone from calling this a 'depression' to referring to it as a 'recession' and looking for the 'next recession'.

Isn't some explanation warranted?

I agree; I think an explanation is warranted.

[loweyecue]

Re: Japan's outlook revised to negative by S&P, keeps AA rating

I can't speak with any authority, but I think there is a difference in scale. The sources I can find put Japan's national debt at 192.1% of an estimated GDP of $5.049T, or about $9.7T. The Treasury puts Japan's holdings of US debt at $757.3B... I'm unclear if this includes private holdings by Japanese citizens and corporations. However, it seems to me that the majority of Japan's debt must have been accrued by actual government spending rather than accumulation of foreign reserves. I agree that there might be some potential for arbitrage, but Japan's debt in their own currency dwarfs their reserve position in our debt.

That makes sense, thanks!