Japanese shares see declines following premier election
Date
9/30/2024 7:40:17 AM
(MENAFN) Asian markets experienced a tumultuous start to the week, showcasing stark contrasts in performance across the region. In Japan, the NIKKEI 225 index plummeted nearly 5 percent, closing down 4.8 percent at 37,919.55 points. This downturn was influenced by the ruling Liberal Democratic Party's decision to elect former Defense Minister Shigeru Ishiba as the new Prime Minister, succeeding Fumio Kishida, who is set to step down on Tuesday.
Ishiba's potential policy shifts, including support for raising interest rates from their near-zero level and possibly increasing corporate taxes, have raised concerns among investors about less favorable market conditions compared to his rival, Economic Security Minister Sanae Takaichi.
In contrast, Chinese markets surged on the news of new stimulus measures aimed at reviving the struggling economy. The Shanghai Composite index soared 7.7 percent to 3,326.47 points, while the Hang Seng index in Hong Kong rose 3.4 percent to 21,343.06 points, with the Hang Seng Mainland Properties Index climbing 8.3 percent. This positive momentum in Chinese markets is particularly timely, as it coincides with the upcoming week-long national holiday celebrating 75 years of communist rule in China. Notably, mainland Chinese markets will be closed from Tuesday through October 7.
The Chinese government's recent announcements have included actions to support the property sector and bolster financial markets. The central bank declared that it would instruct banks to lower mortgage rates for existing home loans by October 31. Additionally, Guangzhou lifted all home purchase restrictions over the weekend, while cities like Shanghai and Shenzhen unveiled plans to ease key buying curbs, signaling a concerted effort to stimulate housing demand and economic growth.
As the dollar weakened against the yen, dropping from over 146 to under 143, Japanese exporters faced challenges, leading to significant declines in their stock prices. Major automotive manufacturers were hit hard, with Toyota Motor Corp. falling by 7.6 percent, Honda Motor Co. dropping 7.0 percent, and Nissan Motor Co. declining 6.0 percent. The rising yen poses disadvantages for these companies, which rely heavily on overseas sales and profits, further complicating Japan's economic landscape as it grapples with inflation and changing leadership.
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