Still, a current account surplus, large foreign exchange reserves and the yen’s importance as an international currency means Japan retains good access to global capital markets, the agency stressed. The country’s gold and foreign exchange reserves of over $1 trillion are second only to China’s, the agency noted.

Japan’s growth this year is expected to be anemic, despite efforts by the government and central bank last year to stimulate it with a slew of measures. The country has maintained ultralow interest rates for years, and the central bank as expected left rates on hold at 0.1 percent on Tuesday.

The government in Tokyo, in office just a few months, has also bolstered spending on social programs aimed at helping households. The government says such measures will also spur economic recovery by lifting consumption. And though Prime Minister Yukio Hatoyama has promised to cut public works spending that drained government coffers under prior administrations, he has struggled to keep spending in check.

On Monday, the powerful lower house of parliament approved a supplementary budget for the fiscal year that ends in March worth ¥7.2 trillion, or $80.3 billion, to help shore up the economy.

And next year, government spending will grow further with a record trillion-dollar budget including ambitious welfare outlays. Mr. Hatoyama has been keen to maintain his generous spending agenda to boost his political support before parliamentary elections this year.

To finance the budget, officials say the nation will issue fresh debt worth a record $485 billion. The new borrowing will bring Japan’s public debt to about $9.4 trillion, or about 181 percent of gross domestic product, at the end of March 2011, by far the highest rate in the industrialized world. Tax receipts, at about $405 billion, are expected to cover less than half the government’s budget, forcing the government to borrow more than it receives in revenue.

Some economists, however, argue that it would be impossible for Japan to trim its debt and overcome deflation at the same time. The latter calls for more government stimulus spending at a time when companies are cutting back on investment, they say.