Japanese Stocks Rise as Prime Minister Ishiba Resigns

Tokyo – Japanese stocks jumped on Monday after Prime Minister Shigeru Ishiba resigned at the weekend, unleashing hopes of fresh leadership and perhaps policy changes.

The Nikkei 225 surged 1.5%, and the Topix rose 1% to an all-time high. Investors responded positively to rumors about potential successors, with Koizumi Shinjiro, who is a son of a former prime minister, and Takaichi Sanae, a close ally of late Shinzo Abe, being among the front-runners. According to analysts, markets favored the hope of pro-growth and deregulation policies under new leadership.

"The market's quite positive reaction came somewhat as a surprise, but it shows enthusiasm for Koizumi and Takaichi," explained Comgest's Richard Kaye. He added that the anti-rate hike stance of Takaichi could enhance growth opportunities.

The move comes amid mounting pressure following Ishiba's loss in the election last year. Fitch Solutions' BMI analysts cautioned that Japan is set for an extended period of political uncertainty before the next leadership change, although ruling LDP party is likely to stay in power.

For currency markets, the yen declined 0.64% to 148.33 against the dollar, while government bond yields rose, with the 30-year yield up at 3.27% after setting records last week. Investors still factor in ongoing inflation and more monetary tightening.

Elsewhere in the Asian region, South Korea's Kospi increased 0.15%, Hong Kong's Hang Seng rose 0.23%, and Australia's S&P/ASX 200 fell 0.38%. China's CSI 300 index dropped 0.3% following exports and imports in August both falling short of expectations.

World oil prices crept up after OPEC+ said it would raise output by a modest 137,000 barrels a day from October, which is a slower rate than in prior months. Brent crude was at $62.20 a barrel and WTI at $65.89.

On Wall Street, American futures were unchanged as investors waited to see new inflation readings later this week, including the producer price index and consumer price index. The Dow, S&P 500, and Nasdaq had all closed lower on Friday following a disappointing jobs report, although each came within their record highs earlier in the day.