Sudden Surge Right After Jimin Party Leadership Election Withdrawal
Regains 29,000 Level After About 2 Months... "Expectations for Additional Economic Measures"
[Asia Economy Reporter Hyunwoo Lee] The Japanese stock market surged after news broke that Prime Minister Yoshihide Suga would not run in the ruling Liberal Democratic Party (LDP) leadership election. The Nikkei 225, Japan's representative index, recovered the 29,000 level intraday for the first time in over two months since June.
According to the Nihon Keizai Shimbun (Nikkei) on the 3rd, the Nikkei 225 index was trading at 29,058.75 at 1 p.m., up 1.81% (515.24 points) from the previous close. The surge came immediately after the news of Prime Minister Suga's decision not to run in the LDP leadership election. The Nikkei index's intraday recovery to the 29,000 level is the first since late June, over two months ago.
Earlier, Prime Minister Suga announced at the LDP's extraordinary executive meeting held that morning that he would not run in the leadership election scheduled for the 29th. Suga cited his intention to "focus on COVID-19 measures" as the reason for not running. Given Japan's political structure where the ruling party leader serves as prime minister, Suga will serve as prime minister only until the end of his LDP leadership term on the 30th of this month. Accordingly, Suga, whose term began in September last year, will step down as prime minister after just one year in office.
Market insiders reported that after morning trading ended, the news that Prime Minister Suga would not run in the LDP leadership election sparked buying momentum due to expectations of additional economic measures following the prime ministerial change.
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