Moody's Investors Service has lowered Japan’s sovereign debt rating to “Aa3” from “Aa2.”

Moody's, one of the top global credit rating agencies, said in a statement Tueday that it was cutting Japan's rating due to the "large budget deficits and the build-up in Japanese government debt since the 2009 global recession.” The agency said it is also difficult for Japan to slow the debt growth in relations to its GDP.

The agency was quick to project, however, that Japan’s overall economic outlook is stable thanks to Japanese investors' strong preference to domestic stocks and their government bonds.