Japan's R&I Reaffirms US Credit Rating, Giving Hong Kong Funds a Boost

Japan's Rating and Investment Information Inc. (R&I) has reaffirmed its triple-A credit rating for the US, despite the three major global agencies downgrading the debt. This means that Hong Kong's Mandatory Provident Fund system can continue to invest over 10% of assets in Treasuries, as R&I is an approved agency for the system. R&I's rating is significant for Hong Kong's pension fund managers, as they would need to divest $2 billion if the rating was downgraded. The company's assessment of US debt risk will focus on fiscal credibility and trust in the dollar.

Japan's Rating and Investment Information Inc. (R&I) has reaffirmed its triple-A credit rating for the United States, despite the recent downgrades by the three major global credit agencies. This reaffirmation allows Hong Kong's Mandatory Provident Fund system to continue investing over 10% of its assets in US Treasuries, as R&I is an approved agency for the system. The significance of R&I's rating is crucial for Hong Kong's pension fund managers, who would have had to divest approximately $2 billion if the rating was downgraded.

R&I's assessment of US debt risk focuses on fiscal credibility and trust in the dollar. The company's stable rating reflects its confidence in the US government's ability to manage its debt and maintain the dollar's status as a global reserve currency. This reaffirmation is particularly reassuring for investors and financial professionals who rely on R&I's ratings for informed decision-making.

The reaffirmation of the triple-A rating by R&I underscores the resilience of the US economy and its debt management practices. It is a testament to the country's strong fiscal position and the confidence that investors have in its ability to repay its debts. This rating is particularly important for Hong Kong's pension funds, which rely on US Treasuries as a safe haven asset.

The decision by R&I to reaffirm its rating comes at a time when global financial markets are closely watching the US debt situation. The recent downgrades by other agencies have raised concerns about the sustainability of US debt and its impact on global financial stability. However, R&I's reaffirmation provides a counterpoint to these concerns and offers a more optimistic view of the US debt situation.

In conclusion, Japan's R&I reaffirming its triple-A credit rating for the US is a positive development for Hong Kong's pension funds and investors worldwide. It provides reassurance about the US government's ability to manage its debt and maintain the dollar's status as a global reserve currency. This rating is a significant factor in the decision-making process of investors and financial professionals who rely on R&I's ratings for guidance.

References:
[1] https://www.morningstar.com/news/business-wire/20250703533427/am-best-affirms-credit-ratings-of-w-r-berkley-corporation-and-its-subsidiaries