Japan's local currency debt rating was raised one level to A1 from A2 by Moody's Investors Service, Moody's said Thursday, citing confidence that the government will pursue debt-cutting measures.
The increase in the long-term rating to the fifth-highest investment grade was the first by Moody's since it assigned Japan the top Aaa grade in 1993. Japan has ¥834.4 trillion in public debt, the equivalent of the economic output of Asia-Pacific's next 16 largest economies combined.
Prime Minister Yasuo Fukuda is committed to curbing the country's debt, the world's largest, through spending cuts, Moody's Senior Vice President Thomas Byrne said in a statement. Fukuda last month replaced Shinzo Abe, who resigned after the Liberal Democratic Party-New Komeito ruling bloc lost control of the Upper House, prompting speculation the coalition would spend to win votes.