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Fitch cuts Japan credit rating as debt balloons

Associated Press Published: May 22, 2012

TOKYO (AP) — Fitch has downgraded Japan's credit rating to A-plus with a negative outlook, reflecting risks from its ballooning government debt.

Fitch Ratings said Tuesday that the downgrade and negative outlook underline growing risks for Japan from high and rising public debt.

Japan's gross government debt is projected to hit 239 percent of its economy by the end of this year, by far the highest of any Fitch-rated country.

A Fitch statement described Japan's plans to control its debt mountain as "leisurely."

But it said Japan's low interest rates mean the government can afford its borrowing while high foreign currency reserves are also a positive factor for the country.

Japan's economic woes were worsened by last year's earthquake and tsunami.