Hong Kong-Japan's finance minister, Masajuro Shiokawa, may be angry with Standard & Poor's Ratings Group for its report two weeks, ago that downgraded the country's long-term credit rating by one notch. He should actually be thankful that investors took the agency's action in stride. The markets appeared to shrug off the new rating on April 19, even though Japan's sovereign'rating, now at double-A-mi-nus with a negative outlook, makes it the worst credit risk among the Group of Seven leading industrial economies, according to S&P. Japanese government bond prices and the yen didn't budge, and stocks in Tokyo actually rose following the news. This was also the week in which S&P scolded Hong Kong's profligate government, but stocks there went up anyway. Yet when South Korean officials talked about raising interest rates, bonds reacted by falling in price (which happens when rates rise). Credit ratings are important, of course, but how closely do investors pay attention?
展开▼
