Moody’s slashes Japanese credit rating to ‘A1’

Credit ratings agency Moody’s has cut Japan’s credit rating, a setback to Prime Minister Shinzo Abe, a day before he begins campaigning for an election that he wants to focus on the economy.

Moody’s cut the rating for the world’s third-biggest economy one level to A1, the same as Bermuda, Israel, Oman, and the Czech Republic. The yen dropped to a seven-year low, then reversed the decline, while Japanese government bonds (JGBs) were little changed.

Moody’s cited uncertainty over whether Japan will achieve its deficit-reduction goals and succeed in boosting growth, two weeks after Abe postponed an increase in sales tax.