Japan investment in US bonds 'unaffected' by downgrade

Japan vowed Monday to continue investing in US government bonds as its finance minister said Tokyo's "confidence" was unaffected by the first ever downgrade of US credit by a major agency. "Confidence in the US bonds is unshaken," Jiji Press news agency quoted Finance Minister Yoshihiko Noda as saying amid fears of market turbulence after the downgrade by Standard & Poor's. Noda said the US Treasury bonds were "an attractive financial product". Japan is the second largest holder of US Treasury bonds after China. US rating agency Standard & Poor's on the weekend cut the rating on US Treasuries from triple A to AA+ with a negative outlook, spawning fears of more market turmoil. Financial chiefs and central bankers of the G7 nations early Monday pledged to "take all necessary measures to support financial stability and growth" as nervous global markets re-opened. The key Nikkei-225 index of the Tokyo Stock Exchange was down 1.15 percent in early trade, having opened 1.40 percent lower.