Comments coming from Moody's and Fitch, Headlines via Reuters:
Moody's says that persistent low economic growth and inflation in Japan has prompted a shift toward greater monetary and fiscal accommodation
- Moody's have thus raise its forecasts for real GDP growth to 0.7% this year and 0.9% in 2017
- Cites delay in the consumption tax hik
- Implementation of additional fiscal stimulus
- And Bank of Japan's new monetary framework
- The positive impact of these structural reforms will be set against intensifying pressures on growth and fiscal expenditure from an aging population.
In the absence of a marked boost to growth from structural reform, we estimate that Japan's already high debt burden will further edge up over the next decade.
And, Fitch:
- The Bank of Japan's latest measures are unlikely to ease pressure on bank profitability, but add to the risks faced by financial institutions - and could end up undermining efforts to boost the economy
- Japanese bank profitability is being eroded by a number of factors, and the BOJ's measures in September came in recognition of the pressures brought about by negative interest rates
- The weak domestic economy has kept loan demand subdued - which, on top of the fierce competition among financial institutions, has dragged on earnings
- Moreover, the continued strengthening of the yen in the face of BoJ easing has added to the pressure on both banks and corporates in Japan
- Banks' net interest margins (NIMs) have fallen steadily since 2010, most recently as a result of the BoJ's negative interest rate policy which has flattened the yield curve further