JAPAN'S credit rating has been downgraded by two levels by rating agency Fitch on concerns about the country's high levels of debt.
Fitch cut Japan's rating to A+ from AA and warned further downgrades were possible.
Japan has by far the highest debt to GDP ratio of any major economy, although much of this debt is held by domestic investors.
The government has spent huge amounts of money on trying to stimulate growth. "The downgrades and negative outlooks reflect growing risks for Japan's sovereign credit profile as a result of high and rising public debt ratios," Fitch said.
"Fiscal consolidation plan looks leisurely relative even to other fiscally-challenged high-income countries, and implementation is subject to political risk."
Following the downgrade, Japanese finance minister Jun Azumi said he would continue with plans to address rising debt levels. "I would like to move ahead with fiscal reform, while making efforts to enact tax and social security reform bills," he said.