Looks like the US has some company: Standard & Poor’s has downgraded Japan’s credit outlook to negative, much as it did for the US last week. In Japan’s case the culprit is, of course, the earthquake and tsunami, which S&P believes could cost the government as much as $609 billion to recover from. The agency left the country’s actual long-term rating unchanged at AA-, however.
Japan’s economy wasn’t in great shape before the disaster, plagued by deflation, an aging population, feeble growth, and high government debt, the New York Times observes. Now, the disaster has damaged many businesses' production capabilities and put a nasty dent in consumer spending. March retail sales fell 8.5%, their biggest drop in 13 years.