Japanese Stocks Rise on Ishiba’s Resignation Announcement
Asian markets traded mostly higher on Monday as investors digested the news of Japan’s Prime Minister Shigeru Ishiba stepping down, alongside anticipation of key regional economic data.
Japan’s Nikkei 225 surged 1.5% following Ishiba’s announcement, which came after mounting pressure due to his party’s defeat in the national election last year. The Topix index also climbed 1% to reach a record high.
Yen Weakens and Bond Yields Climb Amid Political Uncertainty
The Japanese yen depreciated 0.64% to 148.33 against the US dollar, while government bond yields continued their upward trajectory. The 30-year bond yield increased by more than 4 basis points to 3.272%, after hitting a record high the previous week. The 20-year yield also rose by over 3 basis points to 2.676%.
These yield increases reflect investor concerns over persistent inflation, tighter monetary policy, and fiscal uncertainty in Japan. Analysts from BMI, a Fitch Solutions unit, noted that Japan faces a prolonged period of uncertainty heading into the fourth quarter of 2025, highlighting the possibility—though speculative—that opposition parties might consolidate to challenge the ruling Liberal Democratic Party’s leadership succession.
Regional Market Movements and Economic Data
South Korea’s Kospi edged up 0.15%, while the Kosdaq index, focused on small-cap stocks, rose 0.47%. In contrast, Australia’s S&P/ASX 200 declined 0.38%. Futures for Hong Kong’s Hang Seng index were slightly lower compared to their last close.
Investors are also awaiting China’s August trade data, which will provide further insight into the regional economic outlook.
Oil Prices Inch Higher on OPEC+ Production Decision
Following an OPEC+ meeting over the weekend, the group agreed to increase oil production by 137,000 barrels per day starting in October, a notable slowdown compared to previous monthly hikes exceeding 400,000 barrels per day.
Consequently, Brent crude rose 0.53% to $62.20 per barrel, and US West Texas Intermediate futures increased 0.6% to $65.89.
US Market Overview Ahead of Key Inflation Reports
US stock futures remained largely unchanged on Sunday ahead of a week packed with inflation data releases, including the producer price index and consumer price index for August.
Last Friday, US markets closed lower amid concerns over a weakening economy following a disappointing jobs report, despite solidifying expectations for a Federal Reserve rate cut. The S&P 500 fell 0.32%, the Nasdaq Composite dipped 0.03%, and the Dow Jones Industrial Average dropped 0.48%.
FinOracleAI — Market View
The resignation of Japan’s Prime Minister Shigeru Ishiba has triggered a positive reaction in Japanese equities, reflecting investor optimism about potential political change. However, the accompanying yen depreciation and rising bond yields signal underlying fiscal and monetary policy uncertainties that could temper gains.
Market participants should monitor developments in Japan’s leadership transition and upcoming economic data, as these will influence risk sentiment and yield curves. Additionally, the slower OPEC+ production increase may support oil prices, impacting energy-related sectors.
Impact: positive
