International rating agency Fitch Ratings Inc. has revised down its outlook for Japan's credit rating from stable to negative, citing a sharp economic contraction triggered by the coronavirus pandemic.

"A downturn in consumer spending and business investment has been exacerbated by a steep decline in exports associated with weak external demand," the agency said in a news release Tuesday.

While maintaining the sovereign rating at A, Fitch warned that "sharply wider fiscal deficits in 2020 and 2021, as we project, will add significantly to the country's public debt, which even before the pandemic was the highest among Fitch-rated sovereigns as a share of GDP."

The Japanese parliament approved two supplementary budgets for fiscal 2020 in April and June to help cushion the impact of the coronavirus epidemic.

The rating agency said it projects the world's third-largest economy to contract by 5 percent in 2020, before rebounding to 3.2 percent growth in 2021.

Fitch revised its outlook for Japan's credit rating for the first time since April 2017, when it was raised to stable from negative.

Last month, S&P Global Ratings also downgraded its outlook for Japan's sovereign rating to stable from positive, citing a similar reason.

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