TOKYO – Asian stock markets mostly climbed with Japan’s main index surging on Monday morning, despite potential political upheaval following Prime Minister Shigeru Ishiba’s announcement of his resignation as the country’s leader and head of his party.
This decision wasn’t entirely unexpected and is seen as a step towards progress, according to analysts, even though it introduces some uncertainty. The ruling Liberal Democratic Party, or LDP, will now have to conduct an election, with several candidates from the party showing interest in running.
“Although markets might face short-term fluctuations due to the transitional nature of the current leadership, clarity might come once a new leader is in place. The LDP remains the dominant party, so the need for policy compromise will likely continue,” noted Naomi Fink, chief global strategist at Amova Asset Management.
The Nikkei 225, Japan’s key stock index, rose by 1.4% to reach 43,630.54 in morning trading. Meanwhile, South Korea’s Kospi increased by 0.2% to 3,211.36, whereas Australia’s S&P/ASX 200 dropped 0.3% to 8,845.50.
Hong Kong’s Hang Seng edged up 0.3% to 25,487.02, while the Shanghai Composite rose 0.2% to 25,487.02.
On the same day, a report from Japan’s Cabinet Office revealed that the economy grew faster than previously estimated in the first fiscal quarter, at a seasonally adjusted rate of 2.2% annualized, exceeding the earlier projection of 1.0%, thanks to stronger consumer spending and better-than-expected inventory data.
Last week on Wall Street, stock prices ended lower in Friday’s session due to ongoing concerns about the U.S. job market. Investors were uncertain if the slowdown was modest enough to encourage the Federal Reserve to cut interest rates, or severe enough to signal a possible economic decline.
After rising to an early gain, the S&P 500 erased it and fell 0.3% below the all-time high it set the day before. The Dow Jones Industrial Average dropped 220 points, or 0.5%, after swinging between an early gain of nearly 150 points and a loss of 400. The Nasdaq composite edged down by less than 0.1%.
A report from the U.S. Labor Department said American employers hired fewer workers in August than economists expected. The government also said that earlier estimates for June and July overstated hiring by 21,000 jobs.
The disappointing numbers follow last month’s discouraging jobs update, along with other lackluster reports in intervening weeks, and traders are now betting on a 100% probability that the Fed will cut its main interest rate at its next meeting on Sept. 17.
In energy trading, benchmark U.S. crude added 74 cents to $62.61 a barrel. Brent crude, the international standard, rose 80 cents to $66.30 a barrel.
In currency trading, the U.S. dollar edged up to 148.20 Japanese yen from 147.39 yen. The euro cost $1.1709, down from $1.1723.
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AP Business Writer Stan Choe in New York contributed to this report.
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