Japan’s Nikkei 225 rose 1% to a record high at 44,088.50 points in the morning session on Tuesday, following the surge in the equity market after its prime minister Shigeru Ishiba announced his resignation Sunday. Meanwhile, Topix rose 0.64%.
Market participants are eyeing contenders such as Sanae Takaichi, a vocal critic of recent Bank of Japan rate hikes, as well as Shinjiro Koizumi, whose profile has grown as agriculture minister.
Ishiba’s resignation, announced a day after he finalized a trade deal with Washington, came as mounting electoral losses eroded his mandate. Despite the Liberal Democratic Party’s overwhelming presence in the lower house, its loss of majority in the upper chamber means the leadership transition may not be straightforward, raising the possibility of the opposition uniting behind a rival candidate.
Ishiba will remain in office until the ruling party selects a new leader in an upcoming emergency race. Markets are bracing for a period of political and policy flux in the world’s fourth-largest economy as investors assess whether a new face at the helm could loosen fiscal constraints or chart a new course for monetary policy.
