Moody's cuts Japan's rating to Aa3 from Aa2

SYDNEY (MarketWatch)
Ratings agency Moody's Investor Service said Wednesday that it has cut Japan's rating to Aa3 from Aa2 with a stable outlook.
The agency said it made the downgrade due to the country's large budget deficits and a build-up in government debt since 2009.
"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 ratings agency said.
In addition, the earthquake in March has delayed recovery and aggravated deflationary conditions, Moody's added.
"Support for the stable outlook comes from the undiminished home bias of Japanese investors and their preference for government bonds," it noted.