RAM Ratings said April 11 that it lowered the outlook onJapan's gAA3(pi) global-scale rating to negative from stable, as theintroduction of negative interest rates limits policy options to simulate theeconomy.

The rating agency said the inability of reforms to spurinvestments in Japan has raised concerns along with persistently weak pricetrends and the waning momentum of rising wages to boost consumption.

RAM Ratings pointed out that while Japan's fiscal consolidationefforts are a step in the right direction, the size of its debt burden leaveslittle room for fiscal stimulus. Demand for loans has stayed subdued despitethe improved financing conditions brought about by monetary policy easing inthe country.

Consumer sentiment is weak and retail spending has declined.Enterprises across all industries expect business sentiment and sales to drop.