Fitch drops ratings on Japanese debt as the country attempts to rein in debt and spur growth

Economic Indicators Associated Press

Fitch Ratings is lowering Japan's credit rating as the country wrestles with staggering debt.

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Fitch said Monday that the government did not include sufficient measures in its budget to replace a deferred tax increase this fiscal year, which ends next March.

Japan's debt is the largest among developed nations and more than twice the size of the economy.

The ratings agency downgraded Japan's long-term foreign and local currency issuer default ratings to "A'' from "A+." It also lowered its senior unsecured foreign and local currency bonds ratings to "A'' from "A+."

Fitch says that though Japan cut corporate tax rates in the current fiscal year, it wants to cut them again in the next year. It says those factors increased the ratings agency's uncertainty over Japan's political commitment to consolidation.