S&P downgrades Japan's credit ratings

Standard & Poor's downgraded its outlook on Japan's long-term credit ratings to negative from stable, citing diminished prospects for economic reforms and persistent problems in the financial sector.

Although Standard & Poor's affirmed Japan's long-term and short-term local and foreign currency ratings, it cited three reasons for cutting the outlook: limited fiscal flexibility, financial sector problems and ineffectual monetary policy.

Standard & Poor's slashed Japan's sovereign debt rating to AA-plus from AAA in February.