Tokyo Rallies After Ishiba Resigns
Japanese stocks rallied early in the Tokyo session after Prime Minister Shigeru Ishiba announced his resignation, fueling hopes that the new leader will boost growth. The Topix climbed to an intraday record, while the Nikkei 225 rose about 1%. The weakening yen following political news also supported equity sentiment.
The gains were driven by exporters—particularly electronics and machinery—as the yen fell by around 0.6–0.7% against the dollar on Monday morning. Market breadth was positive: more stocks rose than fell, signaling risk-on sentiment following the certainty of the political succession.
Some analysts believe Ishiba's resignation could delay a Bank of Japan interest rate hike, providing an additional boost for stocks, even while pressuring the yen and bonds. A similar sentiment was echoed by VanEck cross-asset expert Anna Wu, who sees more "hope" than "uncertainty" for Japanese equities in this transitional phase.
In the succession market, Sanae Takaichi's name is often mentioned by investors due to her pro-fiscal expansionary and pro-nuclear stance—a combination that Morgan Stanley believes has the potential to boost domestic stocks. The successor's policy direction will determine whether the rally continues or the market becomes more sensitive to BOJ policy normalization.
Source: Newsmaker.id
