Finance Minister Kaoru Yosano said Tuesday that the decision by Moody's Investors Service Ltd. to raise its rating of the government's yen-denominated bonds doesn't alter the country's fiscal problems.
"Even after the upgrade, Japan is still left with public debt outstanding," Yosano said. "How to reconstruct Japan's finances is the biggest challenge for the Finance Ministry."
Moody's brought Japan's local and foreign-currency debt ratings to the same level, Aa2, Monday to reflect that the repayment risk for each is equal.
It raised the local currency debt rating from Aa3 and cut the foreign currency assessment from Aaa, adding that the outlook remains stable.
Japan has the developed world's largest public debt, and the burden is likely to swell to 197 percent of gross domestic product next year, according to the Organization for Economic Cooperation and Development. Stimulus measures to counter the country's worst postwar recession will bring new bond sales to an unprecedented ¥44.1 trillion for the year ending March.
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