Fitch cuts Japan rating as budget fails to offset tax delay

[TOKYO]Japan's sovereign-credit rating was lowered by Fitch Ratings, which cited a lack of steps by the government to offset effects from a delayed sales-tax increase.

Fitch cut the nation's long-term default rating by one step to A, with a stable outlook, it said in a statement released Monday in Tokyo.

"The Japanese government did not include sufficient structural fiscal measures in its budget for the fiscal year" beginning this month to offset effects of the delay in the sales-tax increase, Fitch said in its statement.

Prime Minister Shinzo Abe in November postponed plans to raise the levy to 10 per cent from 8 per cent until April 2017, after a 3 percentage point increase in April last year helped to push Japan's economy into recession.

Mr Abe is set to meet President Barack Obama during a week- long trip that started Sunday, focusing on promoting investment and trade between the US and the world's third-largest economy.

BLOOMBERG