European ratings agency Fitch IBCA has downgraded Japan's long-term local currency rating a notch to AA .

The agency says the move reflects concerns over the health of the country's public finances and, specifically, its mushrooming fiscal deficit. Government debt currently stands at 125% of gross domestic product, the highest level in the OECD, largely as a result of fiscal stimulus packages aimed at dragging the country out of a decade-long recession.