IMF warns U.S., Japan on debt
January 28, 2011
The United States and Japan received sharp warnings from the IMF and ratings agencies Thursday that they must tackle their huge budget deficits to avoid investors dumping their bonds, which would create a sovereign debt crisis and push up their borrowing costs.
Rating agency Standard & Poor's on Thursday cut Japan's long-term debt rating for the first time since 2002, and a day after a U.S. agency raised its 2011 budget deficit forecast by 40 per cent. In the U.S., Moody's Investors Service warned said while the risk to the United States' coveted top triple-A rating was small, it was rising.