Bangkok--15 Mar--Moody's
Moody's recently released several comments on the impact of the Japanese earthquake on Japan’s sovereign rating, economy, corporates, financial institutions and insurers (refer to attached reports).
In summary, a brief description of these reports are as follows :
? "Japan's Economy Will Recover from Earthquake, but Fiscal Consequences are Less Predictable" --- Moody's believes Japan’s economy has the ability to withstand the shock. It will delay any return to a path of fiscal consolidation and may bring forward a tipping point where confidence is lost in the government’s finances. But Moody's remain of the view such a tipping point remains a remote risk. The key continues to be political progress.
? Our sister company, Moodys Analytics, surveys the negative economic consequences from financial cost to the impact on consumer confidence and growth. Refer to the report - "The Macroeconomic Impact of Japan's Earthquake" (Note: If sourcing or referencing this article please quote "Moody's Analytics" or "Matt Robinson, Senior Economist, Moody's Analytics")
? "Japanese Quake - Limited Rating Impact on Financial and Non-Financial Firms" --- Moody's views limited rating impact to the vast majority of rated entities in Japan. Nearly all are broadly diversified with only limited exposure to the most impacted areas. Profits will be hit by operational disruption (including rolling power blackouts for many months) but ratings will be resilient.
? Moody's does see more material issues for 4 sectors — insurance, utilities, regional banks concentrated in the affected areas, some transportation issuers.
Moody's published a report on insurance - "Massive Japanese Earthquake Negatively Impacts Insurers and Reinsurers" and this is also attached. We placed the rating of TEPCO on review for downgrade. The press release is attached.
In coming days, Moody's will continue to identify the key credit issues and publish on them.
Should you have any questions on any of these or other matters relating to Japan, please feel free to contact us.
Kind regards,
Hector
Hector Lim
Moody's Investors Service
+61 2 9270 8141