ABSTRACT
The American rating agencies, with global brand power and superior resources, seemed likely to overwhelm the Japanese rating agencies at that time. Contrary to this prospect, the American agencies’ influence in Japan has diminished, while the Japanese rating agencies have persisted and their legitimacy and utilization within the Japanese credit market have increased. The depression in the late 1920s and early 1930s was a watershed in the history of the US and Japanese corporate bond markets – the depression increased the need for rating agencies’ information to manage the credit risk in the US market, while it made Japanese government and banks exclude credit risk from the market. The American agencies’ modified view on Japan resembled that of many scholars during the 2000s, focusing on changes in Japanese political economy and its possible convergence towards American-style capitalism. The weaker-than-expected demand for credit ratings and fierce competition have caused significant discounts in rating fees, making corporate ratings in Japan less profitable.
