Moody's Downgrades Japanese Debt Rating

Moody's Investment Service downgraded its rating on Japanese government debt by one notch to Aa3 Wednesday, citing the political environment and growing debt burden as contributors to the decision. "Over the past five years, frequent changes in (Japan's) administrations have prevented the government from implementing long-term economic and fiscal strategies into effective and durable policies," Moody's said in a note to clients. Japan has increasingly struggled to control its economy amid a slew of snowballing factors. The country is expected to elect its sixth leader in five years, which has only underscored the impression of revolving door politics. Furthermore, Japan is still feeling the deep ramifications of the March tsunami that has punished commerce. The nuclear impact is being investigated, and many large corporations saw their market values plummet amid an uncertain outlook. The downgrade by Moody's echoes a similar sentiment making its way across the globe. S&P's recent downgrade of U.S. government debt was indicative of the difficulty of global policymakers to reduce dependence on debt while still promoting growth. Ratings agencies have faced increased scrutiny to be more realistic with ratings. Since the 2007-8 financial meltdown, investors and government regulators alike have looked at the industry with a renewed air of suspicion. Japan's benchmark Nikkei index closed lower by 1.07% today.