Press Release|Sovereigns
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KBRA Affirms AA-/K1+ Ratings for Japan; Stable Outlook

16 Dec 2025   |   New York

Contacts

KBRA affirms Japan’s long-term issuer ratings of AA-. KBRA also affirms the short-term issuer ratings of K1+. The Outlook on the long-term ratings is Stable.

This credit rating is an unsolicited credit rating.
With Rated Entity or Related Third-Party ParticipationYes
With Access to Internal DocumentsNo
With Access to ManagementYes

KBRA’s affirmation reflects Japan’s large, wealthy and institutionally advanced economy, its strong external position, and its deep liquidity. These strengths are weighed against very high public debt, demographic pressures and modest growth. The new fiscal stimulus package, about 3.4 percent of 2025 GDP, delays consolidation but should support near term activity. Debt is expected to remain elevated yet affordable, and monetary policy normalization remains difficult. Japan is one of the world’s largest and most diversified advanced economies, but also the most highly indebted among its peers. Risk is mitigated by favorable funding conditions. Borrowing costs remain contained, demand for government securities is strong and mainly domestic, the Bank of Japan holds a large share of outstanding bonds, and households maintain high savings.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1012676