Moody's has rated Japan A1, the fifth-highest level, with a "stable" outlook since December 2014. But it warned in a report in May that it may downgrade the rating "if prospects increase of a material and sustained widening in fiscal deficits leading to a significant deterioration" in Japan's already high debt burden.

TOKYO (AP) — Japanese Prime Minister Shigeru Ishiba said Monday he will stay in office to tackle challenges such as rising prices and high U.S. tariffs after a weekend election defeat left his coalition with a minority in both parliamentary chambers.

The embattled prime minister said he would remain in office to oversee tariff talks with the United States and other pressing matters.

Japan's election outcome may put the central bank in a double bind as prospects of big spending could keep inflation elevated while potentially prolonged political paralysis and a global trade war provide compelling reasons to go slow on rate hikes.

Ishiba's ruling Liberal Democratic Party and its junior coalition partner Komeito were short three seats to maintain a majority in the 248-seat upper house in Sunday's vote.