Ratings agency Standard & Poor's on Wednesday downgraded its sovereign credit rating on Japan by one notch, saying the country was unlikely to revive economic growth and end deflation within the next few years.

"Despite showing initial promise, the government's strategy to revive economic growth and end deflation appears unlikely to reverse this deterioration in the next two to three years," the agency said in a statement.

The agency said it was lowering the sovereign ratings on Japan to A+ from AA-.