Moody's Investors Service said on Thursday any changes in its ratings on Greece would depend on whether Athens was smoothly enacting its fiscal reform plans as promised.
Pierre Cailleteau, the head of Moody's global sovereign ratings, told Reuters in an interview that Moody's would follow the situation in Greece and see what was happening on the ground.
"We have to look at the facts and whether the government of Greece is going to do what it has promised to do," he said.
Rival ratings agency Standard and Poor's said on Wednesday it may downgrade Greece's BBB plus rating by one or two notches within a month, citing downside risks to growth that could hinder the country's deficit-cutting plan.
Cailleteau said that if in the next couple of months Moody's sees that Athens is implementing its plan as promised, it could keep the rating where it is or stabilize the outlook.
"Or if we see, based on evidence, that there is a deviation from the plan, we will change our rating accordingly. So a small deviation would lead to a small downgrade and a large deviation — which we think is unlikely — would lead to a large downgrade," Cailleteau said.
Moody's said earlier this month that debt-stricken Greece could face the risk of a multi-notch rating cut if its public finances remained unsustainable.
Moody's currently has Greece's long-term debt rating at A2 with a negative outlook.
"We want to evaluate the rating quickly but at the same time we are reasonable people. You can't expect a government to turn around a fiscal position in a few weeks," Cailleteau said.
Asked if Greece was in imminent need of support, he said Moody's did not think so.
"All the evidence we have so far is that Greece has been able to raise funds," he said.
European Union finance ministers earlier this month set Greece a deadline of May 15 to take urgent measures to rein in its budget deficit in addition to a mid-March deadline for a review of its progress so far.
Fears over Greek debt have hit the euro and lifted Greek bond yields this year. Investors are looking closely at how Europe tackles the problem.
The euro tumbled to its lowest in a year against the yen on Thursday and dipped within sight of a recent nine-month low against the dollar, below $1.3500.
Moody's said it didn't think the problems in the euro zone would spread to countries such as Australia, New Zealand, China or Japan.
Tom Byrne, senior vice president and Asia regional credit officer at Moody's, said China still had a strong fiscal position.
"There could be contingent liabilities in the banking sector from the credit surge. But we think the Chinese economy has strong medium term growth prospects at least," Byrne said in an interview with Reuters Insider television.
"We don't see any exogenous threats to China."
But Japan's sovereign debt rating could come under pressure if its economy performed poorly and the government failed to draw up convincing fiscal plans, he said.
"The question that we're asking ourselves is ... can Japan get back on course, the course it was on before the (global) crisis?" Byrne said.
"For that to happen we have to see improved confidence in the economy, certainly improved confidence by the corporate sector, and also we have to see a bit more clear-cut fiscal policies."
Last May, Moody's raised Japan's domestic debt rating to Aa2 from Aa3, saying the domestic market was able to absorb new borrowing from the most indebted government in the industrial world.
At the same time, it downgraded the foreign currency rating to Aa2 from AAA.
"The issue is if the deficit cannot be reduced over years beyond 2010, that would be credit negative," he later told a news conference.
In January, rival ratings agency Standard & Poor's threatened to cut Japan's credit rating unless it produces a credible plan to rein in its soaring debt and lift growth in an economy plagued by persistent deflation.
Japan's public debt now stands around 200 percent of gross domestic product, the highest among developed economies.
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