Moody’s: Japan is exposed to an escalation in global trade protectionism

Global rating agency Moody’s recently rolled out its analysis of risks to the Japanese economy. In doing so the rating giant forecasts that Japan will miss the primary fiscal balance target if additional consolidation measures are not implemented.

Key quotes

“Japan will miss the primary fiscal balance target if additional consolidation measures are not implemented.”
“Japan is vulnerable to global trade protectionism and slowdown in the economies of its largest trading partners.”
“Japan is exposed to an escalation in global trade protectionism and a slowdown in its largest trading partners, the US and China.”

FX implication

Although USD/JPY is currently benefiting from the market’s risk-on mode, while being around 108.60, headlines like this could have added burden on the risk-tone during the otherwise trading conditions.