Tokyo markets showed a muted reaction to a downgrade of Japanese federal government debt by ratings agency Moody's, with the yen a touch softer as well as Japanese government bond futures dipping briefly.
"It's been a while since Asia lost its triple-A status, so it is unlikely that Japan's interest prices will rise sharply, " said Fumiyuki Takahashi, managing director at Barclays Funds.
Gold climbed more than 1%, after tumbling from a record high on Tuesday as investors switched money-back into shares, propelling US stocks up around 3%.
The rally, perversely, had been driven by more dismal US economic data, which raised expectations that Federal Reserve Chairman Ben Bernanke uses his speech on Friday at a central bankers' conference in Jackson Pit, Wyoming, to signal a fresh monetary offensive to fend off a restored recession.
Last year, Bernanke used the occasion to prepare the ground for that Fed's second round of quantitative easing, a $600 billion bond-buying programme made to pump cash and confidence into financial markets that became known as "QE2".
"The market has become more pessimistic about the economic outlook and is responding by pricing inside a greater chance of QE3, " said Bricklin Dwyer, economist at BNP Paribas, inside a client note.
"The reality is that we are getting more data confirming a slowdown in manufacturing activity along with a dead cat bounce in the (US) housing sector. "
Asian shares opened up higher but swiftly retreated into negative territory, with Japan's Nikkei share typical down 0. 2%, while MSCI's broadest index of Asia Pacific shares outdoors Japan lost 0. 5%.
World stocks have tumbled this month on fears america is slipping back into recession and as Europe's sovereign debt crisis worsens.
The MSCI index remains down nearly 14% for that month so far, and about 18% below is April high.
Moody's announced shortly before Asian markets opened it was cutting Japan's credit rating by one notch to AA3, mirroring a youthful downgrade by rival S&P, blaming large budget deficits and a buildup of debt because the global recession of 2009.
The yen came under mild pressure, with the dollar trading up just a little around 76. 80.
Japanese government bond September 10-year futures fell initially, however reversed course as equities slipped to trade up 0. 08 point from 142. 63, and the benchmark 10-year yield was steady at 1. 010%.
Japanese government bonds are insulated by the fact that most Tokyo's debt pile is domestically held.
"JGBs have tended not to show any lasting reaction to ratings downgrades previously -- probably because in Japan the problem if anything is one associated with over-saving, which banks recycle into JGBs, which remain 'risk free assets', inch said Naomi Fink, head of Japan strategy at Jeffries Japan.
Gold had been up about 1. 2% around $1, 853 an ounce, after sliding from the record above $1, 910 on Tuesday. Gold's safe-haven appeal has driven it to a number of records in recent months.
US crude oil, which has tended to follow equities recently, rose 0. 2% to $85. 58 a barrel.