Asia-Pacific markets fell after Fitch downgraded the US credit rating.
Asia-Pacific markets fell on Wednesday after ratings agency Fitch downgraded the US from AAA to AA+, citing “anticipated financial deterioration over the next three years.”
IG market analyst Tony Sycamore said this will trigger risk-averse flows in Asia, which means safe-haven buying of currencies and treasuries such as the Japanese yen and Swiss franc against lower stocks and riskier currencies like the Australian and New Zealand dollars.
Japan’s Nikkei 225 index led the region with a loss of 1.21 percent, while Topix traded with a loss of 0.53 percent.
In South Korea, Kospi fell 0.64 percent and Kosdaq 0.72 percent. The country saw its July inflation rate at 2.3 percent, a 25-month low.
Meanwhile, Australia’s S&P/ASX 200 fell 0.67 percent after the Reserve Bank of Australia kept its benchmark interest rate at 4.1 percent.
Hong Kong’s Hang Seng index lost 0.9 percent at the open, while mainland Chinese markets were trading close to a straight line. The Shanghai Composite Index slipped marginally and the Shenzhen Composite Index rose marginally.