Where credit's due

Reform of Japan's public sector has been a drawn-out process, and there's still a lot of uncertainty over issues such as the likely risk profile of restructured government bodies. But credit quality is getting more attention

Japan's sovereign rating was upgraded one notch in April for the first time since 2002. But government agencies and municipalities cannot be so sure of their own standing, thanks - ironically - to the very reforms that helped bring the AA country rating from Standard & Poor's. That's because uncertainty remains over how the restructured public sector will function and be financed, and, therefore, over its risk profile.

The most significant issue regards the level of financial risk faced by