Japan is the world's second largest holder of US debt, with Treasury bond holdings of $886 billion as of March.

Finance Minister Yoshihiko Noda said at a press conference: "The US is taking various steps on the fiscal front, and basically we continue to believe that US Treasuries are an attractive product for us."

Economy Minister Kaoru Yosano, in a similar vein, said that "a lot of investors from all over the world still want to buy Treasury bonds".

The world's number three economy itself has struggled to whittle down a public debt mountain around 200 percent of its five-trillion-dollar economy, the highest debt level among industrialised nations.

S&P in January cut Japan's sovereign rating to AA-minus from AA.

The agency's move Monday -- the first time it has ever placed such a warning on the US's gold-standard AAA rating -- came as political leaders grapple over how to reduce a yawning budget shortfall over the long term.

S&P said it could not foresee any deal between Democrats and Republicans until after the November 2012 presidential and congressional elections, and that without one, the problem was only going to worsen.

The move drove down stocks in the United States and Europe and then Asia.

On Tuesday, Tokyo stocks ended 1.21 percent down, Hong Kong was down 1.34 percent in the afternoon, Sydney closed 1.41 percent off and Shanghai gave up 1.88 percent while Seoul slipped 0.70 percent.