This morning Moody’s cut Japan’s credit rating to Aa3 from Aa2 with a stable outlook.The market reaction was muted, after so many recent downgrades.
The Nikkei moved 1% into the red after early gains of 1%. Other Asian markets declined, with Shanghai down 0.5%. European markets are actually higher after big swings. US futures point to a negative open.
Moody’s also downgraded Mitsubishi UFJ, Sumitomo Mitsui and Mizuho Finl., as well as 12 local governments in Japan.
The Yen remained strong despite the downgrade. Indeed it also resisted new measures to curb its strength, including a $100 billion emergency credit facility for overseas purchases.