Delinquency ratios in Japanese ABS pools have begun to rise since the Japanese earthquake on March 11, according to Moody's Investors Service ABS performance indices.

Moody's said that delinquencies had not risen earlier, because most originators exercised voluntary restraint in their application of pressure on obligors who were delinquent.

But with nearly three months since the March 11 quake, the business environment — including areas unaffected by the disaster — has worsened. It is likely that for some time, the environment for hiring and incomes will worsen, according to Moody's.

"In particular, in the area of consumer finance loans, because of comparatively low levels of creditworthiness, the influence of the quake can be easily felt," Moody's analysts said. "Accordingly, the ratios for delinquencies and defaults could climb."

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