Title:
A Credit Downgrade for Japan, but Some Signs of Hope
Description: This is
a VOA Special English Economics Report.
See text below
Text:
On August twenty-fourth, Moody's Investors Service
lowered its credit rating for Japanese government
debt. The credit rating agency downgraded Japan one
step from Aa2 to Aa3. Japan's finance minister said
trust in the economy "will not be shaken" by the
action. Moody's said it acted because of Japan's
large budget deficits and buildup in government debt
since the two thousand nine global recession.
Japan's public debt is twice the size of its
economy. Japan has the world's third-largest
economy. Moody's said another reason was Japan's
political situation. Japan has had a series of prime
ministers since two thousand six. Japan struggled
more than many other countries after the worldwide
financial crisis. Japan said its economy shrank at
an annual rate of 1.3 percent from April through
June. It was the third quarter of shrinkage in a
row. The earthquake and tsunami in March hurt
manufacturing. Shortages of parts led to a big drop
in sales and profit for Toyota, the world's top
selling carmaker. Yet the report on the economy was
good news. Economists had expected a bigger decrease
following the disasters and the nuclear crisis that
followed. But there is concern that a rise in the
yen could hurt growth. A high exchange value makes
Japanese exports costlier and less competitive.
Hours after Moody's action, Japan announced a
program of one hundred billion dollars in loans to
support business spending. The goal is to help
weaken the yen and lift economic growth.Bond traders
said Moody's downgrade of Japan was not a surprise.
The action had the expected effect of raising
borrowing costs for the Japanese government. Still,
at about one percent, Japan enjoys the lowest
borrowing costs of any major developed nation. On
August fifth, another credit rating agency
downgraded United States government debt for the
first time. Standard and Poor's blamed the political
fight over the nation's debt.Foreigners hold much of
the public debt of the United States and some other
countries. But ninety-five percent of Japan's debt
securities are held by Japanese, mostly banks and
retirement funds.For VOA Special English, I'm
Carolyn Presutti.You can learn English and stay
informed every day from your computer or mobile
device at voaspecialenglish.com. You can also find
us on Facebook, Twitter and iTunes at VOA Learning
English.
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personally reviewed this video and found it appropriate for
the news section of English Global Group. This
is a Voice of America video which covers an interesting
topic in Special English. I would appreciate some feedback from both
students and teachers about this video. You can comment in
the window below using any of a number of different services
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