TOKYO — Moody’s Investors Service on Tuesday downgraded its rating on Japan’s debt.
The agency said it lowered the rating because of Japan’s large budget deficits and growing government debt.
Moody’s cut Japan’s government-bond rating to Aa3 from Aa2. The new rating is three notches below Moody’s top Aaa rating. It said the outlook for the rating is stable. The downgrade puts Moody’s Japan rating in line with other major agencies. Standard & Poor’s and Fitch rate Japan AA-, three notches below their top AAA ratings.
In May, Moody’s warned it could downgrade Japan after the world’s No. 3 economy slipped back into recession in the first quarter because of tumbling output and exports following the March 11 earthquake and tsunami.
Moody’s has maintained its AAA rating on the United States. Standard & Poor’s earlier this month took the unprecedented step of downgrading the U.S., citing its large deficits and political gridlock.
