Japan's return to recession and a bigger-than-expected slump in first-quarter economic growth are negative for its credit rating, Moody's Investors Service said, warning that a delay in recovery could warrant additional fiscal and monetary stimulus.

The triple blow of the March earthquake, tsunami and nuclear crisis has nudged Japan into recession and led to a surprisingly deep 0.9 percent contraction in January-March, a development Moody's said was negative for Japan's rating and adds urgency for Prime Minister Naoto Kan to compile a second extra budget.

Reconstruction and relief expenditures will eventually lead to a rebound in economic growth later this year and in 2012, Moody's said in a statement.

But the scale of the loss in output and income caused by the earthquake may already have lowered the future growth trajectory of the Japanese economy, thwarting Japan's long-term growth rate, which is currently around 1 percent, it said.

While the shock from power shortages will be temporary, the risk of Japanese companies permanently losing global market share due to current supply chain disruptions is more damaging, Moody's said.

Should the rebound in Japan's economy be weaker than forecast or delayed entirely, additional actions by both the Ministry of Finance and Bank of Japan may be needed, the ratings agency said in a statement.

Japan is facing its worst crisis since World War Two after the 9.0 magnitude earthquake and a deadly tsunami battered its northeast coast on March 11, leaving about 25,000 dead or missing and crippling a nuclear plant.

(Reporting by Leika Kihara; Editing by Michael Watson)