The downward trend in the credit quality of Japanese companies that emerged in 3Q 2008 (July 1 to Sept. 2008) became more pronounced in 1Q 2009 (Jan. 1 to March 31, 2009). Downgrades in the Japanese corporate and financial sectors overwhelmingly outnumbered upgrades in 1Q 2009 by 24 to one. Since 4Q 2008 (Oct. 1 to Dec. 31, 2008), when downgrades outnumbered upgrades by nine to one, the weakening trend in the credit quality of Japanese corporations and financial institutions has continued unabated. From 2004 until 2Q 2008 (April 1 to June 30, 2008), upgrades had exceeded downgrades. However, this situation reversed in 3Q 2008 (July 1 to Sept. 30, 2008), and the number of downgrades has since outnumbered upgrades.