Japan's Nikkei Reaches Record High Following PM Ishiba's Resignation

Japan's benchmark Nikkei 225 index rose 0.9% to reach above the 44,000 mark, continuing its rally for the second consecutive day after Prime Minister Shigeru Ishiba resigned on Sunday. The Topix index, which is broader, also rose 0.52%.

The rally was led by technology shares. Semiconductor equipment maker Advantest jumped 7.62%, Tokyo Electron climbed 3.64%, and Renesas Electronics gained 2.59%. Investors are speculating that Ishiba's successor within the ruling Liberal Democratic Party may announce new fiscal stimulus to cushion growth, analysts say.

Market observers indicated that political instability could create short-term fluctuations but the change of leadership is perceived as an opportunity to usher in longer-term stability. The Nikkei is predicted by Julius Baer analysts to hit 46,000 in a year. In the meantime, the Japanese yen moved 0.1% higher against the American currency, at 147.38.

Elsewhere in Asia, markets were generally higher, with South Korea's Kospi advancing 0.35% and Hong Kong's Hang Seng index increasing 1.48% to its highest point since 2021. Australia's ASX 200, however, declined 0.29%, and Indonesia's Jakarta Composite Index lost 1.25% after President Prabowo Subianto launched a surprise cabinet reshuffle.