U.S. debt deal welcomed in Japan

10 years ago by in Travel

Japan, the second-largest holder of U.S. Treasuries in the world after China, has welcomed the deal made by president Obama and top lawmakers to raise the public debt limit and avoid default.

Japan welcomes the announcement and expects the deal to bring about the stabilization of markets, Chief Cabinet Secretary Yukio Edano said at a news conference, while Finance Minister Yoshihiko Noda said he was glad about the last-minute development.

The dollar strengthened over the yen and the Tokyo stock exchange was almost 2 percent up shortly after the announcement, on Monday around noon.

The deal has yet to be presented to the Congress for approval. The new agreement would increase the debt ceiling by at least $2.1 trillion and entail spending cuts of $2.5 trillion.

The U.S. government reached the $14.3 trillion debt limit in May, when it took actions such as spending and accounting adjustments to be able to keep operating normally, but it can only do so until August 2.

Global business and finance experts warned that a U.S. default would be devastating for the nation’s economy, which has 9.2 percent unemployment, and would seriously shake the global stability as well after the 2008 financial crisis.

Photo by Tom Lohdan