It was Japan's first downgrade by a domestic ratings agency, reflecting growing unease among the Japanese public about the country's fiscal quagmire, although the nation has endured a series of downgrades by other agencies such as Standard & Poor's and Moody's Investors service. Both Moody's and Standard and Poor's rate Japan at the lowest rung of AA. R&I said in a statement that even if Japan raised its sales tax, as the government intends, an increase in government debt was unavoidable. There was no sign of stabilising the ratio of debt to GDP, it said. Market reaction to the announcement was limited, as few market players believe Japan, which has a huge pool of domestic savings supporting its bond markets, faces immediate financing problems such as those seen in some euro zone countries. But while the Japanese bond market has continued to attract investors, mostly Japanese, shunning risky assets and euro zone bonds, the clock is ticking for Tokyo to deal with its soaring public debt, which has grown to roughly twice the size of its $5 trillion economy. Japan's ageing and declining population could shrink its private savings in the coming years, while its interest payments, which have been kept low because of persistent deflation, could spiral out of control if bond yields rise. Prime Minister Yoshihiko Noda, aware of such a risk, has vowed to double the sales tax rate to 10 percent by the middle of the decade, as a step to balance the budget. Still, the plan is meeting resistance from many ruling party lawmakers as they fear a voter backlash. Debate on raising the sales tax rate, one of the lowest among major economies, has long been politically touchy one as some argue that the last consumption tax increase, in 1997, triggered a recession that led to a long period of deflation.