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Standard & Poor’s said Wednesday it has raised its outlook on Japan to stable from negative due to signs of an economic recovery.

But the U.S. rating agency kept Japan’s sovereign credit rating the lowest among the Group of Seven countries, at “AA minus and A-1 plus.”

“With this rating action, Standard & Poor’s is signaling to the market that Japan appears secure in its rating category for the next couple of years,” S&P credit analyst Takahira Ogawa said in a report released the same day.

S&P pointed out recent corporate restructuring efforts at the micro level and constructive monetary policy at the macro level as two major factors for the upgrade.

But it warned that an unexpected shift from the current fiscal reforms and money-easing policy could result in another downgrade.

“Japan’s fiscal profile remains its greatest weakness and the reason the sovereign is rated lower than any other G7 government,” Ogawa said.

But Chief Cabinet Secretary Yasuo Fukuda was not pleased.

“We’re not very glad to hear about the upgrading,” he said. “The rating thus far has been too low.

“I think the rating has showed that (S&P) has not thoroughly examined the actual conditions of the Japanese economy. I think the current (rating) is also too low.”

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