Moody's Downgrades Japan On 'uncertainty' Over Reaching Goals

Moody's Investors Service on Monday cut the sovereign-debt rating on Japan to A1 from Aa3, but said the outlook is stable. The ratings cut comes amid increased uncertainty over whether the government can meet its goals for deficit reduction, concerns over medium-term growth prospects -- the third "arrow" of Abenomics -- and Japan's debt load, Moody's said in the release. "While monetary expansion has boosted domestic aggregate demand to some extent, the consumption tax increase on April, 1 2014 has exerted even more powerful downward pressure," the ratings firm said. However, even with the challenges currently facing the government, "Japan retains very significant credit strengths," according to Moody's. The yen seesawed after the news, first extending its slide against the dollar, but then shortly after erasing its loss. The dollar bought �118.38 at the latest, down from �118.67 late Friday in New York. The release came after the close of the Nikkei 225 index , which ended 0.8% higher at 17,590.10.