China's local currency debt rating can be reduced by Fitch

April 12, 2011, 10: 24 pm EDT by JoAnne Norton and Mark Deen

(Updates with the marking of currencies in the second paragraph).

April 13 (Bloomberg) - local currency credit rating of China to Fitch Ratings cut on the concern that increase the indebtedness of companies and the household is a risk to public finance.Long-term Outlook default currency rating local transmitter China has been lowered to "negative" from "stable", Fitch said yesterday. The rating is currently AA-, he said. The long-term foreign currency rating is A + with a stable Outlook.China, major economy of the more rapid growth of the world with approximately 2.8 trillion of foreign currency reserves, has raised interest rates four times since October to fight inflation. Last month, Prime Minister Wen Jiabao said that "exorbitant" home-price increases are main concerns as China seeks to rely more on the inside that requires foreign engine of economic growth.The negative Outlook reflected concerns about the scale of the passive sovereigns, "especially in the context of the increase in the assessments of real estate and inflation", Andrew Colquhoun, sovereign head of the Asia-Pacific of Fitch, said in the statement. "Fitch expects that sovereign support for the banking system will be necessary.".Loans to companies and households in China rose to about 140% of gross domestic product last year of 111% in 2008, Fitch said. The increase is linked to property lending and financing of local government, he said.Concerns of loan "concerns about the quality of a large part of this loan are compounded by the rapid increase of new channels of off-balance sheet of credit, the disclosure of which is extremely poor," the rating company said.Wen, during a visit of Eastern China's Zhejiang province, called on Governments to take responsibility for keeping of affordable housing and the stabilizing said consumer price is the highest priority, according to a statement on the website of the Government April 9 makers raised the minimum fund development for secondary residences buys this year that the Government has focused on measures to speculators, which mainly target houses in major cities. Shanghai and Chongqing imposed of taxes on residential properties and cities including Beijing and Guangzhou has imposed restrictions on housing purchases.

-Editors: Jeffrey Donovan, Paul Panckhurst.

To contact the editor responsible for this story: JoAnne Norton at jnorton@bloomberg.net; Mark Deen in Paris at the markdeen@bloomberg.net

To contact the editor responsible for this story: Craig cstirling1@bloomberg.net Stirling.

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Japan reduced its economic assessment as supporters of earthquake damage

April 12, 2011, 10: 19 am EDT by Aki Ito

April 13 (Bloomberg)--the Japanese Government has reduced its assessment of the economy, for the first time in six months after the earthquake on March 11 killed more than 12,000 and led to the worst nuclear crisis since Chernobyl.

"Even if the Japanese economy was picking up, he showed weakness" since the temblor, the Cabinet Office said in a report today in Tokyo. A lack of power resulting from a crippled nuclear facility, threaten to delay in the resolution of supply chain disruptions and rising prices of oil in pushing growth, he said.Economic and fiscal policy Minister Kaoru Yosano, said yesterday the effect of the economic disaster was greater than anticipated, plans for reconstruction of the indication can exceed Government projections. The Bank of the Japan last week established an emergency loan facility to help affected companies and warned that the event will be exercising a "strong downward pressure" on the third world economy. "There is so much uncertainty surrounding the Outlook, analysts Mizuho Research Institute wrote in a note this week. "We always know the extent of the damage caused by the earthquake and it is more and more research as the nuclear issue will be prolonged."Officials yesterday raised the level of severity of the accident at the nuclear plant of Tokyo Electric Power Co. has to match the level of the 1986 Chernobyl disaster. The Japan is expanding its evacuation area surrounding facilities and has interrupted shipments of vegetables containing radioactive material over the legal limit.Stimulus PackagePrime Minister Naoto Kan aims to compile a stimulus package this month, the cabinet members say could be as large as 4 billion yen (47 billion dollars).Manufacturers of Fujitsu Ltd., Nissan Motor Co. was not in a position of some of their facilities to reopen a month after the disaster and intact plants had cut operations to face power shortages. Damage by the earthquake will be as much as 25 billion yen, the Cabinet Office said producer price for March 23 increased at the fastest rate in 28 months in March, pushed to the top by the highest commodities and the constraints of supply after the earthquakeshowed a report of the Bank of the Japan published today.The fees companies pay for energy and unfinished goods rose 2% a year earlier, more than the estimate of 1.9% median gain of 27 economists surveyed by Bloomberg News. The number of items cost more exceeded those which become cheaper for the first time in nearly two years, signs that deflationary pressure is facilitated.Exports may decline, production stagnated and consumer spending is weakening, according to the report of today who downgraded all three of these components of. A survey of purchasing managers showed manufacturing deteriorated at the fastest rate at least nine years in March. Confidence among consumers of the Japan the nearest dealers plunged to a record pace since the Government began to track data in 2000.The, Ministry of finance is expected to release its report on the trade for March April 20. Data on retail sales are 27 April and industrial production reports are due on April 28 of the Ministry of trade.

-With the help of Mayumi Otsuma in Tokyo. Editors: Lily Nonomiya, Ken McCallum

% JPY

To contact the reporter on this story: Aki Ito in Tokyo at the aito16@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst in the ppanckhurst@bloomberg.net

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