Asian markets drop by 2 per cent

The Asian markets have opened in negative territory on Monday morning, falling by around 2 per cent. Japan\'s foreign minister announced that his country will be holding on to its US bonds for the time being. ­However, Michael Wong, chairman of the credit rating agency CTRisks, says it will not take long before Japanese investors will be forced to reconsider their stance. “I think that at this moment Japan, of course, will make such an announcement, but the US dollar will keep on depreciating, and the economic situation in the US will remain being quite vulnerable in the future,” he explained. “Probably, Japan plus other countries in Asia will try to diversify the risks. That means that they are going to buy bonds issued by other countries, not simply the US ones.” Wong believes that the value of the dollar reserves of such countries as Japan and China will eventually be hurt. “There is little they can do about it, simply because there is no other alternative to the US dollar right now,” he said. “At this moment there’s no other choice. That means, of course, that the Chinese government will try to diversify the risk in the coming years, but the US government bonds will remain as a very liquid asset in the market, and it’s also a quite common reserve for governments.” “So far, no other alternative in the market is available for countries which hold reserves,” he concluded.