The Finance Ministry has sent letters of complaint to foreign credit rating agencies over their recent downgrading of Japanese government bonds, the ministry said Tuesday.
The unprecedented letters, dated April 26, were sent to Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings. In the letters, the ministry questioned the three private firms’ rating criteria and dismissed the possibility of a default on yen debt.
“Their assessments of Japan’s creditworthiness require further explanation,” a ministry official said. “What kind of risk is contemplated as default?”
In the letters, the ministry said, “The current ratings of Japanese government bonds are already too low and any further downgrading is unwarranted.”
Earlier this month, S&P cut Japan’s long-term local and foreign currency sovereign credit ratings by one notch to AA-minus from AA with a negative outlook for economic structural reforms.
In December, Moody’s lowered Japan’s government bonds to Aa3 — equal to S&P’s AA-minus. The downgrades have sent Japan to the bottom of the credit-rating league in the Group of Seven major economic powers.
In the letters, the ministry said, “Your explanations regarding ratings decisions are mostly qualitative in nature and lack objective criteria, which invite questions about the larger issue of the reliability of ratings itself.”
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