Rating agency Standard & Poor's said on Tuesday it saw more than a one-third chance that it would downgrade Japan's sovereign ratings because of uncertainty about whether the government's push to revive growth and end deflation will succeed.
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"The continuing prospect of a downgrade arises from risks associated with recent government initiatives and uncertainty of their success," S&P said in a report.
"Japanese Prime Minister Shinzo Abe's plan to lift Japan out of deflation and spur economic expansion--known as "Abenomics"--has three pillars: bold monetary easing, fiscal efforts to spur growth, and a strategy to induce private sector investment," it said.
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"Of the three engines that Mr. Abe foresees reinvigorating the nation's economy, so far only one, monetary easing, has kicked into full gear. The others remain idle."
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S&P has an AA- long-term rating on Japan's sovereign debt.