HONG KONG (MarketWatch) - Japanese shares hammered across Were All Sectors Tuesday as a downgrade of the Nation&&9;s ratings outlook by Moody&&9;s Investors Service With combined deepening worries over Escalating unrest in the Middle East and Northern Africa.

The benchmark Nikkei Stock Average declined, 1.8% to 10,665.21 in Tokyo afternoon trade, while the Broad Topix index shed 1.8% to 957,542.

The selling WAS accelerated after Moody&&9;s Lowered STI Outlook On The Government of Japan&&9;s Aa2 credit rating to negative from stable, Citing "Heightened Concern That Economic and Fiscal Policies May Not PROVE Strong Enough To Achieve The Government&&9;s deficit reduction target and Contains the inexorable rise in debt , Which Is Well Above Levels Already In Other advanced economies. "

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A rating outlook Lowered May Gold May Not result in actual downgrader year, goal Usually preceded Such a move.

Moody&&9;s outlook move horns just weeks after rival Standard & Poor&&9;s cut Japan&&9;s long-term sovereign-credit rating to AA minus from AA, Saying It Expects Japan&&9;s fiscal deficits to Remain High in the next Few Years and thats the ruling Democratic Party of Japan "Lacks Strategy to address a coherent thesis negative aspects of the Country&&9;s debt dynamics. "Read full story on S & P&&9;s downgrade.

Japanese Government Debt Is The Highest In The Developed World in proportion to The Size of the Nation&&9;s economy. In 2010, the International Monetary Fund Projected Japan&&9;s Government Debt Has around 226% of the Nation&&9;s gross domestic product, while Japan&&9;s Cabinet Office, Government Debt Estimated at about 174% Of The HPM, According to figures Cited by Moody&&9;s.

Still, Much of That IS debt owned Within Japan, a fact-Moody&&9;s says "The Country Insulate from external shocks."

While Expressing Concern Over the Nation&&9;s Ability to Service icts High Levels of debt, Moody&&9;s ratings downgrade icts Said That WAS aussi Unlikely to Affect The Government&&9;s Ability to borrow by Issuance of Japanese Government Bonds.

Need for &&9;urgent&&9; action

Although a Japanese Government Bond Funding crisis is "Unlikely In The near-to medium-term, pressure" could build up over-the long term, Which Should Be taken Into account In The rating, Even at this high end of the Scale, "Moody&&9;s Said .

It Added That The Government&&9;s debt suggests actions are "Urgently Needed to Regain a path of fiscal consolidation." The ratings agency aussi cautioned That year Inability one hand de fait to put in place a "comprehensive tax reform program, gold icts adoption of weak Measures That postpone action Into the indefinite future "Was one possible risk factor lead to steep That Could, Downward rating pressure may be Japan.

Moody&&9;s move Tuesday aussi horns just a week after The Bank of Japan upgraded icts assessment of the Japanese economy is Improving trends in exports and industrial production, while Leaving Interest Rates Unchanged STI policy in a range Between zero and 0.1%. Read BOJ&&9;s decision Earlier this month.

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Purpose In Spite Of The sharp fall in Japanese shares, analysts Some Pointed Out That Japan&&9;s massive debt Was a Well-Known Phenomenon in the Market.

Brett McGonegal, a managing director at Cantor Fitzgerald, Said That Japan&&9;s high debt-to-GDP ratio, although a "cause for alarm," Was not new news, nor Was It A Reason for investors to review recent Their positive outlook.

"The Geopolitical Landscape Is driving global flows right now overrides" any and Most Likely to Developed Market Emerging Market asset allocation.Japan has been "The benefactor of this switch and I find it hard to Believe the ship Will Turner is a dime," He Said, in emailed comments.

Japan&&9;s Nikkei Stock Average IS Among the best performing stock benchmarks in Asia so far in 2011, about 4.3% HAVING Risen "at its current level.

Japanese banks, Which hold "significant holdings of Japanese Government Bond holdings and Could Be Affected by a rating downgrade, Were Among the big losers in Tokyo after Moody&&9;s action.

Banks, Yen Slide

The fall in the Bank shares have cam Moody&&9;s rating outlooks icts aussi Downgraded On The megabanks&&9; banking units.

Shares of Mitsubishi UFJ Financial Group Sank 3.4%, Mizuho Financial Group Gave up 4.1% and Sumitomo Mitsui Financial Group Fell 4.2%.

Said Moody&&9;s rating action Tuesday icts Does not affect Japan&&9;s Aaa foreign currency bank deposit ceilings and leap, And That Those ratings are icts Outlook Remained Stable.

SEVERAL aussi Exporters lost ground, Even as the U.S. dollar jumped Against the Japanese yen. A Weaker yen spurs buying of Exporters Usually shares are Hopes The Depreciation Will Boost The Value of Their repatriated earnings.

Shares of Toyota Motor Corp.. Sank 2.6% and Nintendo Co. Gave up 3.4%, while Sharp Corp.. lost 2.8%.

The U.S. dollar WAS Recently Changing Hands at 83.42 yen, from 83.18 yen in late European trading Monday. Were U.S. Markets closed Monday for a public holiday.

The fall in Japanese stock cam & the yen is a day When Markets Were Already on the edge over Escalating unrest in the Middle East and Northern Africa, boosting crude oil prices. The U.S. dollar "as well as gold jumped aussi be investors&&9; preference for assets thesis - Perceived as relative safe havens in times of turmoil - over equities.

Around the region, China&&9;s Shanghai Composite Fell 2.1%, Hong Kong&&9;s Hang Seng Index Gave up 1.9%, Australia&&9;s S & P / ASX 200 Dropped 0.8% and India&&9;s Sensex slid 0.8%, while South Korea&&9;s Kospi lost 1.9%.

In commodities trading, April crude oil rose $ 6.78 to future $ 96.49 a barrel it Globex.

Asia Stocks to Watch: Tokyo stocks slide as yen Moody&&9;s Lowers Outlook