Moody’s Investors Service said Japan may face “long-term key challenges” to its credit rating, already lowered in August because of a swelling debt load.

Japan’s ability to finance its debt at low cost remains strong, Moody’s said in a statement today, adding that the outlook for the nation’s Aa3 rating is stable.

At the same time, frequent changes in leadership have weakened the government’s ability to improve its finances and the March 11 earthquake has weighed on growth, it said.

“The effectiveness and credibility of fiscal policy, especially in articulating long-term targets, have suffered since the end of the administration of Junichiro Koizumi,” who stepped down in 2006, Moody’s said. Japan has had six prime ministers in the past five years.

Domestic savings, low exposure to non-resident investors for financing government debt and a current-account surplus are among factors that have supported the government’s funding capabilities, according to Moody’s.