Hiroshi Okuda, chairman of the Japan Federation of Employers' Associations (Nikkeiren), urged the government and private sector Wednesday to try to prevent a further downgrading of Japan's sovereign ratings to avoid possible panic in the economy.
Okuda, also chairman of Toyota Motor Corp., downplayed the recent wave of cuts by rating agencies, saying that one-notch drops will probably have little impact.
But he added, "Further drops in the ratings would plummet government bond prices and upset the nation's economy."
Both the government and private sector should strive to prevent this from happening, he said.
On Tuesday, major rating agency Moody's Investors Service Inc. lowered its rating on yen-denominated domestic securities issued or guaranteed by the government from Aa2 to Aa3. The move followed a similar step by Standard & Poor's Corp. in late November.
Meanwhile, Okuda also showed concern over the rising unemployment rate, which posted a record 5.4 percent in October.
"Some say that the actual jobless rate could be worse, since there are approximately 2 million to 2.5 million workers whom companies plan to but have yet to eliminate," he said.