On the 30th, the first trading day after Shigeru Ishiba was elected as the new president of the Liberal Democratic Party, Japan's representative stock index, the Nikkei 225 average (Nikkei index), started with a sharp decline.
On that day, the Nikkei index fell immediately after the market opened, recording 38,155.5 at around 9:22 a.m., down 4.18% (1,666 points) compared to the previous trading day.
The Nihon Keizai Shimbun explained, "President Ishiba has shown a positive stance on taxing financial income and raising corporate taxes, which has heightened caution in the stock market regarding economic policies, leading to a selling trend that dislikes short-term uncertainty."
The market expects short-term volatility to increase until President Ishiba's policies become clear.
Rina Oshimo, a strategist at Okasan Securities, stated, "Volatility is likely to be high early in the week," adding, "Since Ishiba has advocated for fiscal consolidation and other measures, a rise in the yen could be a headwind for Japanese stocks."
At around 9:25 a.m. that day, the dollar-yen exchange rate was at 142.74 yen.
Goldman Sachs said, "Volatility is likely to continue until positions on investor concern areas such as corporate governance reform and tax rates on financial income are clarified."
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