Moody's downgrade of Japan's credit rating last week came as no shock to markets, while economists warned the appreciation of the yen is a more crucial issue for the country.
Japan's beleaguered prime minister Naoto Kan has resigned after a turmoil-filled 15 months in office, clearing the way for the country's sixth leader in five years.
Asian markets are trading lower as investors weigh up hopes of further action by the Federal Reserve against Moody's downgrade of Japan.
Credit rating agency Moody's has downgraded Japan's sovereign debt rating by one notch, saying weak political leadership has hampered growth.
Japan's economy performed better than expected in the second quarter, indicating relative resilience in the aftermath of the Tohoku earthquake.
Nancy Curtin is chief investment officer of Close Asset Management......
Now is not the time to be swayed by high-frequency newsflow and economic data, writes Philip Lawlor, group strategist at Smith & Williamson.