Credit rating agency Moody's stripped Japan of its coveted AAA rating on its foreign currency debt today, rekindling some speculation that other major economies may pay for their efforts to revive growth with credit downgrades.
Unlike many of its peers in the the top triple-A category, the world's number two economy relies mainly on domestic funding and Moody's combined the cut in the largely symbolic foreign rating with an upgrade by a notch to domestic government bonds.
The move coincided with a survey of Japanese manufacturers that showed sentiment edged up from record lows this month, keeping alive hopes that a disastrous first quarter marked a low point in Japan's and the world economy's worst recession in six decades.
But as governments from Beijing to Washington have committed trillions of dollars to kickstart their economies, ballooning debt and deficits raised questions about the ability of nations such as US or Britain to keep their top credit grades.
