- Japan's electronics sector has suffered from myriad problems
- Fitch cuts Panasonic by two notches to BB and Sony's rating by three notches to BB-, with both firms given a negative outlook.
Japan's embattled electronics sector suffered another blow on Thursday as ratings agency Fitch downgraded industry titans Sony (IW 1000/39) and Panasonic (IW 1000/31) to junk status for the first time.
The agency slapped a speculative rating on each firm, pointing to their weak balance sheets and declining position in the global electronics sector as they come up against stiff competition from overseas.
In the wake of huge losses, Panasonic, Sony and rival Sharp (IW 1000/115) have announced massive corporate overhauls that include selling off divisions and tens of thousands of job cuts as their shares plunged.
Japan's electronics sector has suffered from myriad problems including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes that left their finances in ruins.
Panasonic has warned it is on track for a $9.6 billion annual loss, while Sony expects to eke out a small profit, after four years in the red.
