:00:00. > :00:13.Now on BBC News, all the latest business news live from Singapore.
:00:14. > :00:21.Asian stock markets fall and the Japanese yen continues to be strong.
:00:22. > :00:27.We met an exporter in Japan feeling the reaction to the UK's vote to
:00:28. > :00:32.leave the EU. And more bad news for the UK as markets take another
:00:33. > :00:43.tumble. It has stripped off its AAA credit rating and the pound sees
:00:44. > :00:48.further falls. -- it is stripped of. Good morning, Asia, hello, world. It
:00:49. > :00:53.is Tuesday. Glad you could join us for this edition of Asia Business
:00:54. > :00:57.Report. I am Rico Hizon. We kicked off with Brexit and market jitters
:00:58. > :01:01.are continuing in the region in the wake of the UK's vote to leave the
:01:02. > :01:03.European Union, the major markets opening lower again this morning. As
:01:04. > :01:44.you can see on your Tokyo. Yesterday we saw a relief
:01:45. > :01:45.rally but now it is down. Indeed, it has really been a
:01:46. > :01:54.for investors here. On Friday, the Nikkei fell by nearly 8%. And as you
:01:55. > :01:59.mentioned yesterday, we saw a bit of bargain-hunting, and today it opened
:02:00. > :02:03.sharply lower. Most of the exporter 's' shares are down and that is
:02:04. > :02:08.because the Japanese yen continues to strengthen, not just against the
:02:09. > :02:12.British pound but also against the US dollar and all the major
:02:13. > :02:18.currencies. And that hurts exporters because the strong yen makes their
:02:19. > :02:23.product more expensive overseas. I went to visit one factory in Tokyo
:02:24. > :02:32.to see how the result of the EU referendum may affect his business.
:02:33. > :02:37.In an economic cycle of peaks and troughs at small companies like this
:02:38. > :02:43.struggle the most. For 40 years this man has been supplying parts for big
:02:44. > :02:47.Japanese exporters. During the global financial crisis he had to
:02:48. > :02:54.close one of his factories. Now he is hit by the strong yen as a result
:02:55. > :02:58.of Brexit. TRANSLATION: We were envious of the EU being a single
:02:59. > :03:02.market. There are no tariffs. So it is hard to understand why the UK
:03:03. > :03:10.want to leave, and the strong yen will affect us. When it hit 99 on
:03:11. > :03:14.Friday it was a real shock. The consensus here seems to be confusion
:03:15. > :03:20.over why the UK it wanted to leave the EU at all. And Japanese
:03:21. > :03:25.companies are not just affected by the strong yen. They have been
:03:26. > :03:29.investing heavily in the UK, with many basing their European
:03:30. > :03:35.headquarters there. So will they pull their money out of the UK?
:03:36. > :03:40.Europe, you know, is likely to do some soul-searching. A lot of rules
:03:41. > :03:44.and regulations are likely to be changing. From here there are likely
:03:45. > :03:48.to be calls for additional referendums in other parts of
:03:49. > :03:53.Europe. So if you are a businessman, I don't have a lot of time, I need
:03:54. > :03:57.to focus on what I can rely on, so I am going to leave Europe and I am
:03:58. > :04:03.going to go to Asia. So it is going to be sayonara Europe and welcome to
:04:04. > :04:09.Asia. But the yen is where investors like to park their money when things
:04:10. > :04:11.get risky. With the strong yen already hurting Japanese exporters,
:04:12. > :04:15.authorities are trying to reassure investors that they are ready to do
:04:16. > :04:26.whatever it takes to stabilise the currency. And the Japanese yen is
:04:27. > :04:30.currently trading at around 101 yen against the US dollar. That factory
:04:31. > :04:36.owner who I spoke to yesterday said 105 to 110 is a comfortable level,
:04:37. > :04:41.and that is why when he saw 99, the double digit, he got really shocked
:04:42. > :04:47.and he said it reminded him of the global financial crisis back in 2007
:04:48. > :04:53.and 2008, when the yen strengthened even further, to the 80s, and that
:04:54. > :04:56.really affected his business and the rest of corporate Japan. So the
:04:57. > :05:01.authorities have repeatedly said that they are ready to intervene if
:05:02. > :05:06.we see another violent swing strengthening the Japanese yen.
:05:07. > :05:13.Thank you so much, Mariko Oi. 101 yen, a level not seen since 2013.
:05:14. > :05:16.And while the yen has surged, some Asian currencies have slumped
:05:17. > :05:30.following the vote, among them the Indonesian rupiah and the Malaysian
:05:31. > :05:34.ringat. Philip is an expert from London. She said the slump could
:05:35. > :05:39.lead to a co-ordinated response from central banks. I think what we might
:05:40. > :05:45.see that continues is a co-ordinated, either a co-ordinated
:05:46. > :05:46.currency intervention or a co-ordinated liquidity intervention
:05:47. > :05:51.so central banks acting in concert to make sure there is liquidity in
:05:52. > :05:55.the market. I think what is important to recognise is that it is
:05:56. > :06:00.not just about currency intervention as such. Many of these currencies
:06:01. > :06:05.have already faced multiple shocks including the lower oil price, for
:06:06. > :06:12.example, that has been hitting oil exporters and commodity exporter 's.
:06:13. > :06:16.So this Brexit vote really adds to the risks that have been on the
:06:17. > :06:22.radar screen for a lot of these countries to begin with. In a sign
:06:23. > :06:28.of further uncertainty, ratings agencies have downgraded the UK's
:06:29. > :06:38.ratings. Standard and Poor's has stripped them of their last AAA
:06:39. > :06:47.rating, cutting theirs from double A+ 288. It indicates that there is
:06:48. > :06:53.at least a chance in the next few years it will go down again -- to
:06:54. > :06:57.AA. They could be a number of triggers, it could be the weaker
:06:58. > :07:00.economy, it could be slippage on the fiscal side, you could have higher
:07:01. > :07:06.government debt, you could have external side payments, or you could
:07:07. > :07:11.have further downward pressure on the constitutional risks. And of
:07:12. > :07:15.course that is much discussed in the country right now, that is the
:07:16. > :07:18.reaction in Edinburgh that there might be another Scottish
:07:19. > :07:21.independence referendum, which would leave you with a situation where you
:07:22. > :07:25.have two very challenging situations to deal with at the same time.
:07:26. > :07:31.Leaving the European Union is something no one has ever attempted
:07:32. > :07:35.before while at the same time, they are testing the wheel of the people
:07:36. > :07:40.north of the border to leave the UK. -- testing the will. Given the
:07:41. > :07:44.environment of policy-making right now, there are great challenges,
:07:45. > :07:46.great uncertainty is so lots of opportunities for things to go
:07:47. > :07:50.wrong. It doesn't have to happen that way but we think there is a
:07:51. > :07:54.decent chance things might get tricky and that is why we are
:07:55. > :07:58.keeping a negative outlook. The Brexit vote has continued to occupy
:07:59. > :08:07.the minds of his best leaders meeting at the World Economic Forum
:08:08. > :08:12.in China's city of Tianjit. There is a warning that the effect of the
:08:13. > :08:16.global economy might last a decade. We have seen Chinese companies
:08:17. > :08:22.heavily investing in Britain. Are they now reconsidering their
:08:23. > :08:27.investments? Well, when you speak to companies here at the World Economic
:08:28. > :08:31.Forum and ask them about the likely impact of Brexit on their investment
:08:32. > :08:35.decision-making, it really does depend on the company and depends
:08:36. > :08:39.also on the industry. We heard earlier from the chairman of a major
:08:40. > :08:46.carmaker saying that not only would there be no negative impact but it
:08:47. > :08:50.was looking to increase but there is a major emphasis on hi-tech here,
:08:51. > :08:55.and when it comes to start-ups and other companies trying to get into
:08:56. > :09:00.Europe, it is a different story. For example, we heard from a CEO of a
:09:01. > :09:04.Shanghai -based investment company which pumps money into start-ups
:09:05. > :09:12.here, and this is what its CEO had to say. I think part of that impact,
:09:13. > :09:16.at least in the short term, might be concentrated in Chinese companies
:09:17. > :09:19.that have been going global. So a lot of Chinese companies are looking
:09:20. > :09:24.at investments overseas, have been setting up offices overseas and have
:09:25. > :09:29.been doing trade and investment building up in economies which are
:09:30. > :09:32.mature and emerging. So a Chinese company thinking about an EU
:09:33. > :09:37.platform for that new market opportunity might no longer think
:09:38. > :09:43.about setting up in London or in the UK and then it will be focused
:09:44. > :09:46.mainly in France or Germany. So a lot of uncertainty there. As you can
:09:47. > :09:50.see people are still trying to weigh up what the impact of the Brexit
:09:51. > :09:54.might be in China. Now people thought they were prepared for this
:09:55. > :09:57.but as the reality of it is dawning on Chinese companies having to come
:09:58. > :10:01.to terms with it, and looking around and deciding what are they going to
:10:02. > :10:04.do, there is a lot of debate about what will come in the coming weeks
:10:05. > :10:17.and coming months. Thank you for joining us from Tianjin, at the
:10:18. > :10:20.World Economic Forum. Thank you for investing your time with us. Asian
:10:21. > :10:30.stocks in negative territory, goodbye for now.
:10:31. > :10:32.The top stories this hour: Britain's credit rating is downgraded,
:10:33. > :10:36.as the referendum prompts warnings of a sharp slowdown in growth.
:10:37. > :10:40.A group of British MPs have challenged China's record on human