Fitch Ratings has downgraded Japan's sovereign debt rating to A+ from AA and with a negative outlook, as the country struggles to push through much needed tax hikes to rein in its huge public debt.

The downgrade reflects growing risks for Japan's sovereign credit profile as a result of high and rising public debt ratios, said Andrew Colquhoun, head of Asia-Pacific Sovereigns at Fitch. "The country's fiscal consolidation plan looks leisurely relative even to other fiscally-challenged high-income countries, and implementation is subject to political risk," he said.

The dollar rose against the yen after the announcement, now moving around 79.74 versus the yen.

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