US and Japan grow but Europe sees ratings lowered

The US economy continued to produce jobs in September. Non-farm payrolls rose by 103,000 in September. The unemployment rate held at 9.1 percent.

Japan also appears to have been growing recently. Its index of coincident economic indicators rose a 0.3 points in August. The index of leading economic indicators, however, fell 0.8 points.

The Bank of Japan is no doubt mindful of the fragility of Japan's recovery and kept its key interest rate unchanged on Friday while extending a 1.0 trillion yen loan programme for financial institutions in areas affected by the March 11 earthquake by six months.

The biggest threat to continued global growth is probably Europe, where sovereign credit ratings keep getting downgraded. On Friday, Fitch ratings downgraded the credit ratings of Italy and Spain. Spain's foreign and local currency long-term issuer default ratings were cut to AA- from AA+ while Italy's were lowered to A+ from AA-. The outlook for both countries is negative. Meanwhile, Belgium’s Aa1 local- and foreign-currency ratings were placed under review for a downgrade by Moody’s.

Sovereign ratings were not the only ones cut on Friday. Bank rating were also hit.