Asian shares rise as Japan politics weigh on yen
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HONG KONG: Asian markets rose on Monday (Sep 8), with Tokyo closing higher after Japanese Prime Minister Shigeru Ishiba's decision to resign pushed down the value of the yen.
Investors were also digesting weak United States jobs data, while crude prices climbed after eight key members of the OPEC+ alliance said they had agreed to again boost oil production.
Tokyo's Nikkei index closed up 1.5 per cent, with Japanese exporters benefiting from a slide in the yen's value - one dollar bought 147.82 yen in afternoon trading, up from 147.07 on Friday.
Japanese bond yields also climbed after Ishiba said Sunday he would step down after less than a year in power, heralding fresh uncertainty for the world's fourth-largest economy.
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"I don't think we can say that the resignation of PM Ishiba is a complete surprise, as it's been mooted for some time, but the timing of the announcement is certainly unexpected," said Michael Brown, senior research strategist at Pepperstone.
"As for the market reaction, this obviously introduces significant downside risks for the (Japanese yen) and for long-end" Japanese government bonds (JGBs), he added.
Last week, the yield on 30-year JGBs hit a record high, following rises in the US and Europe on the back of concerns about political uncertainty and public finances.
Potential candidates to lead Japan's ruling party are "all likely to propose looser fiscal stances than Ishiba, hence further pressuring the long end of the curve, where demand for JGBs had already been waning quite significantly", Brown said.
Shanghai closed 0.4 per cent higher. Hong Kong was up 0.8 per cent, Taipei gained 0.2 per cent and Seoul rose 0.5 per cent.
Jakarta gained 0.6 per cent and Wellington rose 0.4 per cent, but Bangkok and Singapore were flat and Sydney shed 0.2 per cent.
Last week's US jobs data has cemented expectations of a Federal Reserve interest rate cut later this month.
In Asia, "rising expectations of Fed rate cuts and with that lower US yields should be a welcome development to some extent, providing some breathing space and policy room for Asian central banks", Michael Wan, senior currency analyst at Japanese bank MUFG, said in a note.
"Nonetheless, the key risk for Asian currencies would also lie in a sharp US slowdown and hard-landing recession through sharply slower exports to the US, which we stress is not our base case."
In early European trade, London was up 0.2 per cent, Paris climbed 0.5 per cent and Frankfurt jumped 0.7 per cent.
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