Summary The Japanese economy had been on the upswing as Abe's blitz to spur growth helped weaken the yen.
TOKYO (AFP) - Standard & Poor s said Thursday that it had affirmed its long-term sovereign credit ratings on Japan at AA- but the outlook remained negative, despite efforts to boost the nation s growth, dubbed Abenomics.
S&P also affirmed its short-term unsolicited sovereign credit ratings on the world s third largest economy at A-1+ .
"Our ratings on Japan balance the country s strong external position, its prosperous and diversified economy, political stability, and its stable financial system against a very weak fiscal position that the country s ageing population and persistent deflation exacerbate," S&P said.
The Japanese economy had been on the upswing as Prime Minister Shinzo Abe s blitz to spur growth helped sharply weaken the yen, giving a lift to exporters profitability and driving a stock market rally last year.
A huge monetary easing campaign by the Bank of Japan was a cornerstone of the programme, aimed at overcoming years of deflation.
But economists warned that strong growth was taking a hit as Tokyo raised its consumption tax to 8.0 percent from 5.0 percent -- the first rise since the late 1990s.
S&P said the outlook on the long-term ratings remained negative, which "reflects our view of the still-sizable risk of a slow return to sustained inflation and healthier economic performance".
It added: "Following several quarters of strong growth, the economy contracted sharply in the wake of the sales tax hike in April 2014."
Japan s economy shrank 1.8 percent on-quarter in the three months to June, worse than the initially estimated fall of 1.7 percent.
