'Numerous' Japanese banks downgraded

24 August 2011

A number of Japanese banks have seen their ratings cut due to fears over the country's capability of effectively tackling its debt - the largest arrears in the industrialised world.

Moody's Investors Service downgraded Mizuho Bank, Bank of Tokyo Mitsubishi-UFJ, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation by an average of one notch after slashing the nation's own standing, AFP reports.

The ratings agency noted the action came as most of the large lenders have considerable government bond holdings.

It stated the move is a result of the "combined impact of the change in the rating of the government of Japan ... and Moody's reduced assumptions for government support to the banking system in a stress scenario".

The government's ability to support banks should another financial crisis arise has been significantly diminished of late, the organisation - whose parent company Moody's Corporation employs around 4,500 people across the globe - added.

By Tony Aynsley

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