Moody's Downgrades Japan Rating to Aa3 from Aa2

Tokyo, Aug. 24 (Jiji Press)--Moody's Investors Service on Wednesday downgraded its credit rating on Japanese government bonds by one notch to Aa3 from Aa2, citing large budget deficits and the debt's buildup since 2009.
Moody's also said the rating's outlook is "stable."
"Over the past five years, frequent changes in administrations have prevented the government from implementing long-term economic and fiscal strategies into effective and durable policies," the major U.S. credit rating agency said in a statement.
The March 11 earthquake and tsunami and the subsequent nuclear crisis "have delayed recovery from the 2009 global recession and aggregated deflationary conditions," it said.
"Prospects for economic growth are weak," making it more difficult for Japan to achieve its deficit reduction targets and carry out comprehensive tax and social security reform measures, Moody's maintained.
This was Moody's first downgrade of Japan's sovereign rating in nine years and three months. The Aa3 rating is the fourth highest of the 21 scores assigned by the company. Currently, such countries as Italy, Spain and Qatar are rated similarly.
In January, Standard & Poor's cut its Japan rating to AA minus from AA.