Gold in yen hits day's highs after S&P cuts Japan

LONDON Jan 27 (Reuters) - Gold priced in yen rallied to session highs on Thursday after yen came under broad pressure following a downgrade to Japan' sovereign ratings.

Ratings agency Standard & Poor's cut its rating on Japan's sovereign debt to AA- from AA and kept its outlook stable and said the downgrade reflected the view that the government's debt ratio would continue to rise. [ID:nTKX007174]

Yen/gold rose to a session high of 111,475 yen an ounce before trading at 111,297 yen at 0802 GMT, showing a 0.5 percent gain on the day.

Dollar-priced spot gold XAU= extended losses, touching an intraday low of $1,339.78 an ounce, down nearly 0.5 percent on the day, under pressure from the rise in the U.S. currency against the yen. JPY=

Gold's usual inverse correlation to the U.S. dollar has broken down in the last few trading sessions and on Thursday reached its most positive since mid-September.

(Reporting by Amanda Cooper; Editing by Alison Birrane)