(Reuters) - S&P Global Ratings on Friday revised Japan's outlook to 'positive' from 'stable' as the country's stronger economy sets the stage for fiscal improvement.
Japan's formidable external position, its prosperous and strengthening economy, and the yen's role as a global reserve currency offset weak public finances and adverse demographics, S&P Global Ratings said in a statement.
S&P Global Ratings affirmed its 'A+' long-term and 'A-1' short-term foreign and local currency unsolicited sovereign credit ratings on Japan.
The positive outlook on the long-term rating reflects Japan's healthier growth prospects in both real and nominal terms, the rating agency said.
An official at Japan's Finance Ministry declined to comment on S&P's latest action, but said Tokyo intends to keep on working to improve its fiscal conditions.
"We understand securing the market's confidence on Japanese government bonds is an important task. We intend to continue working toward fiscal consolidation, while doing our utmost in economic and fiscal management," the official told Reuters.
Japan's outstanding public debt burden is the worst in the world at more than twice the size of its economy.