Tokyo - AFP
Tokyo stocks were lower in opening trade on Tuesday after major credit rating agency Standard & Poor\'s warned Germany, France and 13 other eurozone members of possible credit downgrades. The Nikkei 225 index at the Tokyo Stock Exchange opened down 0.59 percent after the Dow Jones Industrial Average pulled back from triple-digit advances and closed up 0.65 percent in New York. The Tokyo benchmark index then narrowed the loss to 0.44 percent, or 38.00 points, to 8,657.98 in the first 20 minutes of trading. After its initial weakness on the S&P move, the Nikkei will likely remain resilient as undervalued Japanese stocks attract bidders, said Hideyuki Ishiguro, supervisor of investment strategy at Okasan Securities. Before paring gains, stocks on Wall Street had soared earlier Monday after French President Nicolas Sarkozy and German Chancellor Angela Merkel said they had agreed on a new eurozone fiscal programme to combat the debt crisis. \"The closing tone wasn\'t too bad,\" Ishiguro said of the New York market. \"No major reaction in Japanese stocks is likely. There are many investors who want to buy on dips,\" he told Dow Jones Newswires. Raising the stakes three days before Europe\'s leaders are to meet on the deepening debt crisis, S&P on Monday warned the eurozone on possible cuts to sovereign credit ratings. The agency said it would complete a review of ratings \"as soon as possible\" following the EU summit in Brussels on Thursday and Friday. \"Systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole,\" the ratings agency said in a statement. Cyprus and Greece, with their ratings already cut to just above or at junk bond level, were not affected by the warning. The euro fetched $1.3391 and 104.22 yen in early Asian trade, compared with $1.3394 and 104.27 yen in New York late Monday. The dollar was also almost flat, trading at 77.83 yen.