Moody's Investors Service has cut the rating on Japan's government from Aa2 to Aa3

Moody's Investors Service has cut the rating on Japan's government debt by a notch to Aa3, blaming massive budget deficits and also the build-up of debt since the 2009 world recession. they need said that many factors create it tough for the country to slow the expansion of debt-to-GDP and so drive this rating action.The agency had warned in might that it's going to downgrade Japan's Aa2 rating owing to heightened issues concerning its faltering growth prospects and a weak policy response to take care of a bulging public debt, currently twice its USD five trillion GDP."Several factors create it tough for Japan to slow the expansion of debt-to-GDP and so drive this rating action," Moody's said in a very statement, adding that the March eleven earthquake and ensuing nuclear crisis had exacerbated Japan's issues. Thomas Byrne of Moody's Ratings went on to mention, "We initial lowered Japan's AAA rating back in 1998. Since then bond yields are on a declining trend and moving inversely with the increase in government debt. therefore we tend to don’t think about ourselves to be late during this. In fact, the rating modification reflects the long-term risks to the economy from high budget deficits and high debt. At an equivalent time, the stable outlook recognises that strengths of Japan can still support patrons and a really low funding price for the govt. therefore we tend to don’t see any eminent JGB crisis over the rating horizon."