Moody’s Investors Service maintains a negative outlook on some asset classes, including mortgages, within Japan’s structured finance market. Of 11 asset classes reviewed, Moody’s takes a stable outlook on five classes including mortgage-backed securities collateralized by ‘conforming’ residential loans. The other six classes keep their negative outlooks, including MBS collateralized by commercial mortgages and ‘other’ residential mortgages. The outlooks on key asset classes remain mixed but are unchanged from Moody’s last report on them in March. “The unchanged outlooks are due to the fact that while the Japanese economy has largely started to worsen in H208, its slowdown could also be said to have bottomed,” said Moody’s senior credit officer Mitsuteru Masuoka. Moody’s also saw auto loans, credit cards and cash advances making up asset classes within stable securities. These types of debt, although steady, may not see a significant level of growth for some time, analysts noted in a statement. “[A]lthough we believe that the uncertainty over the macro-economy is now somewhat less than before, the unemployment rate and the number of bankruptcies of medium- and small-sized business are still at high levels,” Masuoka added. “Therefore, it will take some more time before people are convinced of a recovery, which should accompany growth in income and private consumption.” Write to Diana Golobay.