It said, however, that the March 11 disaster, which obliterated whole towns on the northeast coast and triggered a nuclear crisis, would not hurt Japan's medium-term growth potential.
The credit ratings agency said the cost of rebuilding could range from 20 trillion yen to 50 trillion yen ($245 billion to $612 billion).
It said 30 trillion yen was its central forecast, if there are no measures to boost revenue, such as tax increases.
"Although we do not expect the disasters to materially hurt the country's medium-term growth potential," Standard & Poor's said it forecast the disaster would increase Japan's fiscal deficits.
"Standard & Poor's expects costs related to the March 11, 2011, earthquake, tsunami, and nuclear power plant disaster will increase Japan's fiscal deficits above prior estimates by a cumulative 3.7 percent of GDP through 2013," it said in a statement.
It forecast the deficit would would rise to 145 percent of GDP in the financial year ending March 31, 2014, compared with its previous forecast of 137 percent.
"We revised the outlook on the long-term rating on Japan to negative to reflect the potential for a downgrade if fiscal deterioration materially exceeds these estimates in the absence of greater fiscal consolidation," it said in a statement.
The ratings agency said it affirmed its long-term sovereign credit rating at "AA-".
It warned that its projections were "uncertain" due to ongoing developments at the Fukishima nuclear power plant, where workers are battling to cool reactors and spent fuel rods to prevent a meltdown or further radiation leaks,
"Much will depend on Japan's political leadership and its ability to forge a political consensus on how to offset fiscal measures in the future," it said.
"The extent of environmental contamination in northeastern Japan remains unknown."
The nuclear disaster, the world's worst since Chernobyl 25 years ago, caused electricity shortages while the quake and tsunami damaged and destroyed production facilities and infrastructure, disrupting the supply chain.
"Although we expect no lasting damage to Japan's supply chains, some manufacturers could decide to move a greater share of production offshore," the ratings agency said.
"Combined with the headwinds of intermittent deflation and a fast-ageing population, Japan will be challenged to raise its real GDP growth potential much above one percent annually over the medium term, in our view."