Economics Report.This week,Moody's Investors Servicelowered its credit ratingfor Japanese government debt.The credit rating agencydowngraded Japan one stepfrom Aa2 to Aa3.(SOUND)Finance Minster Yoshihiko Nodasaid trust in the economy"will not be shaken"by Wednesday's action.Moody's said it actedbecause of Japan'slarge budget deficitsand buildup in government debtsince the two thousand nineglobal recession.Japan's public debtis twice the size of its economy.Japan has the world'sthird-largest economy.Moody's said another reason was Japan's political situation.Japan has hadfive prime ministerssince two thousand six.The current prime minister,Naoto Kan,is expected to resign soon.Japan struggled more thanmany other countriesafter the worldwidefinancial crisis.This month, Japan saidits economy shrankat an annual rate of 1.3 percentfrom April through June.It was the third quarterof shrinkage in a row.The earthquake and tsunamiin March hurt manufacturing.Shortages of partsled to a big dropin sales and profit for Toyota,the world's top selling carmaker.Yet the report on the economywas good news.Economists had expecteda bigger decrease followingthe disasters and the nuclearcrisis that followed.But there is concern that a risein the yen could hurt growth.A high exchange valuemakes Japanese exports costlierand less competitive.This week, Japan announceda program of one hundredbillion dollars in loansto support business spending.The goal is to help weakenthe yen and lift economic growth.Bond traders saidMoody's downgrade of Japanwas not a surprise.The action had the expectedeffect of raising borrowing costsfor the Japanese government.Still, at about one percent,Japan enjoys the lowestborrowing costs ofany major developed nation.Earlier this month,another credit rating agencydowngraded United Statesgovernment debt for the first time.Standard and Poor's blamedthe political fightover the nation's debt.Foreigners hold much ofthe public debt of the United Statesand some other countries.But ninety-five percentof Japan's debt securitiesare held by Japanese,mostly banks and retirement funds.On Tuesday, Prime Minister Kanmet with American Vice PresidentJoe Biden.Mr. Biden visited Japanat the end of a trip to Asia.And that's the VOA Special EnglishEconomics Report.