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Japan Corporate Credit Spotlight 2024 Sees Resilience Amid Adversity Abroad

TOKYO (S&P Global Ratings) Oct. 17, 2024--Corporate Japan is on firm footing, even if the global economy falters.

That's according to a report S&P Global Ratings published Oct. 17, 2024, titled "Japan Corporate Credit Spotlight: Resilience Amid Adversity Abroad."

S&P Global Ratings expects ongoing stable creditworthiness for the Japanese corporate sector over the next one to two years, supported by a strong financial base.

Further improvement in creditworthiness is likely to be limited. Many Japanese companies will increase growth investments and shareholder returns amid market expectations for higher profit and improved capital efficiency. Growth investments exceeding our expectations are a potential risk factor for creditworthiness.

A significant slowdown in global economic growth, heightened geopolitical tensions, and other changes in the macro environment also pose potential risks, in our view. We expect the impact of currency movements and rising domestic interest rates to be limited.

S&P Global Ratings has since 2017 selected approximately 100 companies, some of which we do not rate, to analyze for this annual report. We consider these companies to be representative of Japan, mainly based on sales, market capitalization, and outstanding debt.

We analyze the industry to which these companies belong and the creditworthiness of each company. For unrated companies, we only evaluate business and financial profiles.

LIVE WEBINAR & Q&A

Media are welcome to join S&P Global Ratings for a live webinar and Q&A on Friday, Oct. 25, 2024, at 11 a.m. Tokyo time. Our analysts will discuss our latest insights on emerging trends and key risk factors for the Japanese corporate sector. Please register via this link:

https://event.on24.com/wcc/r/4719087/08832F7D158B3D8063AC2B7F935E8FDB?partnerref=Email1

This report does not constitute a rating action.

S&P Global Ratings' assessments of business and financial risk profiles are a component of our framework for credit ratings analysis and are not credit ratings. A rating committee determines the final credit rating along with a combination of these assessments, our assessments on management and governance, financial policy, modifiers and other relevant items, and influence from the issuer's group or governments.

We base our assessments of business and financial risk profiles of companies we do not rate solely on public information. For companies we do not rate, we do not assess components necessary to derive a final credit rating, such as the combined output of the business and financial risk profile assessments, modifiers, or group and government influence. Our assessments of the business and financial risk profiles of companies we do not rate in this study are a limited reference indicator that we extrapolate using our rating criteria. Therefore, these assessments in and of themselves do not represent final credit ratings.

The report is available to RatingsDirect subscribers at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box at www.spglobal.com/ratings.

Primary Credit Analysts:Hiroyuki Nishikawa, Tokyo (81) 3-4550-8751;
hiroyuki.nishikawa@spglobal.com
Shinichi Endo, CFA, Tokyo (81) 3-4550-8773;
shinichi.endo@spglobal.com
Secondary Contacts:Makiko Yoshimura, Tokyo (81) 3-4550-8368;
makiko.yoshimura@spglobal.com
Hiroki Shibata, Tokyo + 81 3 4550 8437;
hiroki.shibata@spglobal.com

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