TOKYO, Aug 8 (Reuters) – The Nikkei average fell to a five-month low on Monday after Standard & Poor’s downgraded the U.S. sovereign debt rating, dragging down all sectors across the board, although the selling appeared to have run its course for the short term.
Analysts warned, however, that persistent worries about the global economy could spark further selling in the longer term, although the Nikkei had steadied after falling 5.4 percent last week and with the dollar holding above 78 yen.
“Since the yen has not strengthened much since the downgrade and other ratings agencies did not follow suit, investors may stay on the sidelines until more catalysts emerge,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Full story: Nikkei falls on U.S. downgrade, next focus is FOMC | Reuters