HONG KONG: Asian markets rose on Monday (Sep 8), with Tokyo closing higher after Japanese Prime Minister Shigeru Ishiba’s decision to resign pushed down the value of the yen.
Investors were also digesting weak United States jobs data, while crude prices climbed after eight key members of the OPEC+ alliance said they had agreed to again boost oil production.
Tokyo’s Nikkei index closed up 1.5 per cent, with Japanese exporters benefiting from a slide in the yen’s value – one dollar bought 147.82 yen in afternoon trading, up from 147.07 on Friday.
Japanese bond yields also climbed after Ishiba said Sunday he would step down after less than a year in power, heralding fresh uncertainty for the world’s fourth-largest economy.
“I don’t think we can say that the resignation of PM Ishiba is a complete surprise, as it’s been mooted for some time, but the timing of the announcement is certainly unexpected,” said Michael Brown, senior research strategist at Pepperstone.
“As for the market reaction, this obviously introduces significant downside risks for the (Japanese yen) and for long-end” Japanese government bonds (JGBs), he added.
Last week, the yield on 30-year JGBs hit a record high, following rises in the US and Europe on the back of concerns about political uncertainty and public finances.
Potential candidates to lead Japan’s ruling party are “all likely to propose looser fiscal stances than Ishiba, hence further pressuring the long end of the curve, where demand for JGBs had already been waning quite significantly”, Brown said.
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