But there is concern that a rise in the yen could hurt growth. A high exchange value makes Japanese exports costlier and less competitive. This week, Japan announced a program of one hundred billion dollars in loans to support business spending. The goal is to help weaken the yen and lift economic growth.

Bond traders said Moody's downgrade of Japan was not a surprise. The action had the expected effect of raising borrowing costs for the Japanese government. Still, at about one percent, Japan enjoys the lowest borrowing costs of any major developed nation.

Earlier this month, another credit rating agency downgraded United States government debt for the first time. Standard and Poor's blamed the political fight over the nation's debt.

Foreigners hold much of the public debt of the United States and some other countries. But ninety-five percent of Japan's debt securities are held by Japanese, mostly banks and retirement funds.

On Tuesday, Prime Minister Kan met with American Vice President Joe Biden. Mr. Biden visited Japan at the end of a trip to Asia.

And that's the VOA Special English Economics Report. For more business news and to learn English, go to voaspecialenglish.com. I'm Mario Ritter.