Fitch affirms Japan at 'A', outlook stable

Fitch Ratings has affirmed Japan's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'A' with a stable outlook. 

The ratings agency expects the Japanese economy to expand 0.8% in 2019, the same outcome as in 2018, despite an unexpectedly robust 2.1% growth in 1Q19 (seasonally adjusted, annualised). GDP growth, however, is expected to lose steam through the rest of the year and early 2020, courtesy of weakening exports and industrial production.

Key points (Source: Fitch Ratings)

Japan's ratings balance the strengths of an advanced and wealthy economy, with high governance standards and strong public institutions, against weak medium-term growth prospects and high public debt.

Japan has strong external finances, underpinned by a persistent current account surplus as well as large net external credit and international investment positions relative to peer. 

Japan's high level of gross general government debt (GGGD), at over 230% of GDP, is the highest among Fitch-rated sovereigns, and poses a key rating constraint.