Japanese Prime Minister Shinzo Abe's move on Wednesday to delay a 2 percentage point hike in the national sales tax was widely anticipated given the sluggish state of the economy. What that means for Japan's creditworthiness is more fuzzy.
Raising taxes is a crucial element of paring Japan's mountainous debt pile. As such, the delay raises concerns over the perilous state of government finances as well as the durability of "Abenomics"—a set of fiscal and monetary policies aimed to shake up the sclerotic economy.
That's not to say all rating agencies are ready to pull the trigger.
S&P Global Ratings, one of the 'Big Three' agencies alongside Fitch Ratings and Moody's, told CNBC on Thursday that it sees no implication on Japan's credit ratings as a result of the news.
"It doesn't spell the end of efforts by the government for fiscal consolidation. We believe when economic conditions are correct, they will hike the sales tax because their debt levels are already so high and there's not a lot of room for them to continue current levels of spending," explained Kim Eng Tan, senior director of sovereign ratings.
In the meantime, he believes fiscal performance is unlikely to weaken. Last year, S&P lowered Japan's rating to A+ from AA-, four levels below its highest rating of AAA.
"The game plan for now is to generate growth and bring back inflation. When conditions are right, as they were in 2013, then you can hike the tax. And even if growth does slow as a result, you will still generate an increase in tax revenue," Tan added.