Asian equity markets were mixed on Tuesday as investors weighed volatile commodity markets and news of Japan’s rating downgrade. Moody’s downgraded Japan’s credit rating to A1 from AA3 late on Monday, adding to fears over the future of the country’s economy and pushing the yen off seven-year lows against the dollar.
“It remains be seen if Moody’s critiques have any merit. The ratings agencies have been notoriously wrong in their economic assessments of G-3. There are several reasons to be more optimistic about Japan’s near-term prospects including the sharp fall in energy price and the rise in the exchange rate,” Boris Schlossberg, managing director of FX strategy at BK Asset Management, said in a note.
Volatility in commodity markets continued on Tuesday, with U.S. crude below $69 a barrel after rallying 5 percent overnight. Meanwhile, gold also traded lower following a 4 percent surge overnight but still managed to hold above $1,200.
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