(MENAFN - AFP) Japan's embattled electronics sector suffered another blow on Thursday as ratings agency Fitch downgraded industry titans Sony and Panasonic to junk status.
The agency slapped a speculative rating on each firm, pointing to their weak balance sheets and declining position in the global electronics sector.
Fitch said it cut Panasonic by two notches to BB, while it slashed Sony's rating by three notches to BB-, with both firms given a negative outlook.
"The downgrade reflects Panasonic's weakened competitiveness in its core businesses, particularly in TVs and panels, as well as weak cash generation from operations," Fitch said in a statement.
"It also reflects the agency's view that the company's financial profile is not likely to show a material improvement in the short to medium term.
Fitch also cast doubt on Sony's prospects, saying a "meaningful recovery will be slow, given the company's loss of technology leadership in key products, high competition, weak economic conditions in developed markets and the strong yen".
Japan's electronics giants have suffered as the high yen makes their products less competitive overseas while they posted losses in their mainstay TV businesses owing to fierce competition from South Korean and Taiwanese rivals.