TOKYO: Moody's Investors Service yesterday downgraded Japan's sovereign debt rating by one notch to A1, citing rising uncertainty over the country's ability to hit its debt-reduction goal.

The announcement briefly sent the yen to a seven-year low against the dollar.

Tom Byrne, regional credit officer of Moody's, said the downgrade was closely linked to Prime Minister Shinzo Abe's decision to delay next year's scheduled sales tax hike, which made it more challenging for Japan to achieve its target of reducing the primary budget deficit in fiscal 2020. Reuters