Japanese yen extended its gains against the U.S. dollar on Wednesday, despite Moody’s downgrade of the country’s rating, reflecting increased demand for safe-haven currencies as concerns grow over faltering U.S. economy and euroarea debt crisis.

USD/JPY declined to 76.55 from 76.66 Tuesday during early European trading. The pair had hit a post-war low of 75.95 on Aug. 19.

Moody’s Investors Service on Wednesday, lowered Japan’s sovereign credit rating by one notch to Aa3 with stable outlook, citing reason as nation’s weak economic growth outlook would make it difficult for the country to manage its debt burden, currently the largest in the world.

“Japan downgrades, which have been happening for years, are a useful reminder that downgrading a major sovereign clearly does not imply, per se, that its currency will fall or its bond yields rise,” Societe Generale said in a note.

Earlier on Wednesday, the Japanese authorities announced $100 billion package to support domestic businesses to cope up with the continuing appreciation in yen.

“We do not think today's package was of significant importance in determining the future course of yen. Direct FX intervention coupled with monetary easing will continue to be the next meaningful measure Japanese government can take in tackling with yen strength,” said Societe Generale.

Besides, the Japanese government said they are considering monitoring currency markets, which mandates the financial institutions to disclose their trading positions.

“The measure will have only a temporary effect, as financial institutions simply move FX trading to overseas market. We don't think Japanese government would want to pay such a high price for a one-off yen weakening effects,” said the note.