Standard & Poor’s Downgrade Japan to AA

The recent opening of Standard & Poor’s to revise downgrading the prospect of Japan raises the risk of deterioration of the credit rating of the country while simultaneously triggers fear that the United States might come to follow. The internationally respected entity expressed concern about the huge deficits and weak growth prospects in Japan, which is the second largest economy in the world. The S & P downgraded the outlook of Japan from stable to negative, without excluding a real deterioration of the solvency of the country in the future. The evaluation of S & P for Japan is AA, one level below the highest rating. A downward credit evaluation will increase borrowing costs for Japan, as investors would be demanding higher yields for protection. This increases concerns about growing deficits and debt levels of the U.S. due to the declining revenues during the recession and the long-term costs of the social security program.