The Japan Credit Rating Agency (JCR) stands as Japan’s premier financial services entity, specializing in credit ratings for corporate debt and foreign bond issuers. Additionally, JCR offers a wealth of financial and economic analyses to guide its clients in assessing counterparty credit risk.
Key Highlights
- Leading Rating Body: JCR is Japan’s foremost credit rating agency, delivering ratings for corporate and financial bond issuers across Japan.
- Global Outreach: The agency extends its rating services to over 200 foreign entities.
- Comprehensive Research: JCR produces regular financial market, economic, and industry research.
- Extensive Market Coverage: Covers over 60% of Japan’s publicly rated corporate entities and more than 70% of its financial sector.
- International Recognition: Registered as a Nationally Recognized Statistical Rating Organization in the U.S. since 2007 and certified in the European Union in 2011.
- Dual Rating Scales: Employs long-term and short-term rating scales similar to other international rating agencies.
- Expanding Network: Forming alliances globally with various credit rating agencies.
Understanding Japan Credit Rating Agency (JCR)
The JCR, founded in April 1985, is a pivotal bond rating agency in Japan and rates a vast majority of Japanese corporate debt, including asset-backed securities. It also delivers critical services like debt securities ratings of all categories, financial market insights, economic and industry research, and comprehensive data services.
Through decades of financial turbulence—covering events like the Japanese real estate bubble, the Asian financial crisis, the 2007-08 global financial crisis, the European sovereign debt crisis, and the East Japan Tsunami—JCR has solidified its expertise in credit risk analysis.
JCR continually extends its global reach, forming partnerships with entities such as the Association of Credit Rating Agencies in Asia (ACRAA), VIS in Pakistan, CARE Ratings in India, HR Ratings in Mexico, and MARC in Malaysia.
Core Responsibilities of Japan Credit Rating Agency (JCR)
JCR rates over 60% of nearly 1,000 publicly rated issuers in Japan, securing 70% influence within Japan’s financial sectors. Its ratings are trusted in key global markets, including the U.S., Europe, Turkey, Hong Kong, Indonesia, and Thailand.
The firm offers diverse services, including private credit assessments, credit risk estimation models, industry seminars, green and social financial evaluations, and rich economic and industryresearch content.
JCR transparently details its rating methodologies across five categories: corporates, financial institutions, the public sector, structured finance, and sovereigns & supranationals, via its website.
The Dual Rating Scales of Japan Credit Rating Agency (JCR)
JCR employs two primary rating scales—long-term and short-term—to assess debt issuances.
Long-Term Rating Scale
The long-term rating scale ranges from AAA to D, resembling the ratings used by Western agencies like S&P and Moody’s. Here’s the breakdown:
- AAA: Highest quality
- D: Default
Within this range, plus and minus signs further refine the ratings between AA and B.
Short-Term Rating Scale
The short-term rating scale runs from J-1 to J-3, alongside NJ and D:
- J-1: Top-tier quality
- D: Default status
By leveraging these comprehensive rating systems, JCR ensures a nuanced assessment of creditworthiness, facilitating informed decisions for investors globally.
Related Terms: credit ratings, bond rating agencies, asset-backed securities, Nationally Recognized Statistical Rating Organization
References
- Japan Credit Rating Agency, Ltd. “About JCR”.
- Japan Credit Rating Agency, Ltd. “Global Activities”.
- European Securities and Markets Authority. “CRA Authorisation”.
- Securities and Exchange Commission. “Seven Credit Rating Agencies Register with SEC as Nationally Recognized Statistical Rating Organizations”.
- Japan Credit Rating Agency, Ltd. “Information about JCR Ratings”.
- Accuity Bankers Almanac. “JCR’s Rating Definitions”.
