Japan's long-term government bond ratings, which currently stand at a prime Aaa, have been placed under possible downgrade, Moody's Investors Service announced Thursday.
If realized, it would be the first downgrade for Japan and could lead to higher borrowing costs for both the government and Japanese firms.
The news jolted financial markets in Tokyo, with the benchmark Nikkei average of 225 blue chips on the Tokyo Stock Exchange falling 105.05 points -- 0.64 percent -- to finish at 16,188.01. The yen fell to 141.70 to the dollar from around 140.