World Economy

Korea Conflict Will Hurt Japan, Vietnam Rating

Korea Conflict Will Hurt Japan, Vietnam RatingKorea Conflict Will Hurt Japan, Vietnam Rating

Excluding South Korea, Japan and Vietnam are the countries whose sovereign ratings are likely to be hit most by a potential military conflict on the Korean Peninsula, Moody’s Investors Service said Saturday. A possible conflict over North Korea’s nuclear programs would have a strong impact on South Korea’s credit rating, which is currently at Aa2 stable, Moody’s said in a recent report, Yonhap reported. Aside from the South, Japan, rated A1 stable, and Vietnam, B1 positive, are the most exposed sovereigns, it added. “The broader implications for the US (Aaa stable) and China (A1 stable) would be relatively limited. For the US, a sharp lift in military spending would add to, and bring forward fiscal pressure, weighing on its fiscal metrics,” said the ratings firm. “By contrast, Japan’s growth would likely slow markedly and this would jeopardize a durable stabilization in government debt.” With Vietnam, supply chain disruption and the loss of exports to South Korea would weaken the Southeast Asian nation’s credit profile.


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