Businessmen pass before a prices board in Tokyo. (file photo)
Source: Press TV
Major credit rating agency Moody's Investors Service has downgraded Japan's sovereign debt rating by one notch to Aa3.
The ratings agency, which performs international financial analysis on commercial and government entities, cut Japan's government debt rating on Wednesday, blaming the country's large budget deficits for the downgrade, Reuters reported.
The build-up of debt since the 2009 global recession was cited as another reason for the new rating, which concluded a review begun on May 31, putting pressure on the Japanese government to address the country's growing economic woes.
"Several factors make it difficult for Japan to slow the growth of debt-to-GDP and thus drive this rating action," Moody's said in a statement.
Japanese Finance Minister Yoshihiko Noda declined to comment on the Moody's move, but appreciated government efforts, saying, "The smooth sales of Japanese government bonds at recent auctions show that confidence remains unshaken.”
Japan is still struggling with aftermath of the huge quake and subsequent tsunami that hit the country back in March.
The credit rating assesses the credit worthiness of a government's debt issues, a financial indicator to potential investors of debt securities such as bonds.