TOKYO (Reuters) - Asian equities gained on Tuesday as a rebound in the crude oil price gave resource-related sectors a breather, but Tokyo shares bucked the trend and slipped as the yen's losing streak was tempered.
Crude oil held to a swathe of gains after rebounding sharply overnight from five-year lows. The bounce in oil and other commodities was a good omen for currencies such as the Canadian and Australian dollars and also helped gold to bounce back.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent. Australian shares gained 0.6 per cent.
Tokyo's Nikkei shed 0.4 per cent. Japanese equities and government bonds mostly shrugged off a downgrade of Japan's sovereign debt rating by Moody's on Monday.
The rating agency downgraded Japan by one notch to A1 from Aa3, citing rising uncertainty over the country's ability to hit its debt-reduction goal. The downgrade came just after Japanese premier Shinzo Abe opted to postponed an increase in sales tax intended to tackle Japan's debt burden.
"It can be said that the sales tax delay had gained the support of the international community as it was meant to help the economy amid a slowdown, and the downgrade is unlikely to change such views," said Masafumi Yamamoto, a market strategist at Praevidentia Strategy in Tokyo.
"As for Japanese government bonds (JGBs), which are more directly impacted by downgrades, any effect is likely to be temporary thanks to the Bank of Japan's quantitative easing. Past downgrades have also had little impact on JGBs," he said.
JGB 10-year futures were down 0.12 point at 146.78 but still within striking distance of a record high 146.96 hit on Monday.
The US dollar dipped 0.1 per cent to 118.285 yen. In turbulent trade immediately after Moody's downgrade of Japan the greenback jumped to a seven-year high of 119.15 but its gains were pared.
U.S. crude oil was down 0.8 per cent at US$68.40 a barrel, after posting a 4 per cent rise overnight from a five-year low of US$63.72 in a squeeze on bearish positions.
Gold, beaten down after Switzerland on Sunday voted against a proposal to boost gold reserves, also held on to gains after rebounding sharply on spillover support from the bounce in oil.
Spot gold was little changed at US$1,205.40 an ounce after gaining 3.7 per cent the previous day.