Standard & Poor's on Monday said it is affirming its credit ratings on Japan, citing the sovereign's strong external position and a recovered financial system.

The rating agency affirmed the long- and short-term credit ratings at AA- and A-1+, respectively. The outlook on the long-term ratings remained 'negative.'

S&P said its rating on Japan balances the extremely strong external position, prosperous and diversified economy, and its recovered financial system with a very weak fiscal position, aging demographics, and persistent deflation.

"We believe the measures adopted by the new Shinzo Abe administration at the beginning of its term will be critical if it is to arrest what we see as a prolonged decline in Japan's sovereign credit standing," the rating agency said in a report.

Meanwhile, during a debate in Parliament on Monday, Prime Minister Shinzo Abe indicated that if Japan is unable to attain the 2 percent inflation target, there may be a need to revise the law governing the central bank.

He also clarified that the recent policy moves are not directly aimed at weakening the yen, but is just one of the many factors influencing the exchange rate.

The meeting of finance ministers and central bankers of the Group of Twenty in Moscow over the weekend abstained from directly criticizing Japan for the recent depreciation of yen. Instead, they supported the policy actions taken by the new government and the Bank of Japan to stimulate economic growth.

At the same time, G20 vowed to refrain from competitive devaluation. "We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open," the ministers and central bankers said in a statement on Saturday.

RTTNews