Fumio Kishida's unexpected resignation led to a plunge in the Japanese stock market and a rise in the Japanese yen

The slowdown in US inflation and the warming expectations of interest rate cuts continue to benefit Asian stock markets, with the Asia-Pacific markets opening collectively higher, but the morning gains narrowing. The Japanese stock market opened higher for the third consecutive day. However, due to the resignation of Fumio Kishida, the Japanese stock market plunged and turned lower during the trading session.

On Wednesday, the Japanese stock market continued the momentum of recovery from the historic plunge last week. Stock prices fell at noon, with the Nikkei 225 index down 0.43% to 36,075.51 points, and the TOPIX index narrowed its gains to 0.76% to 2,572.92 points.

Data released by the US yesterday showed that the US Producer Price Index (PPI) for July only increased by 0.1% month-on-month, lower than the expected 0.2%. Signs of cooling US inflation have raised market expectations for a rate cut by the Federal Reserve next month, with tech stocks leading the gains in the S&P 500 index. The Japanese stock market is still in a rebound phase from oversold conditions, with electronic products and car exporters being among the major contributors to the rise in the TOPIX index.

Later in the morning, Fumio Kishida informed party members that he plans to withdraw from the race for the presidency of the Liberal Democratic Party and will resign as Prime Minister. Subsequently, the Japanese stock market turned lower.

• The Japanese stock market opened higher but turned lower by midday. The Nikkei 225 index fell by 0.43% to 36,075.51 points, and the TOPIX index narrowed its gains to 0.76% to 2,572.92 points.
• Asian markets opened higher, with South Korea, Taiwan, and Australia seeing gains narrow in the morning. The KOSPI rose by 0.68% to 2,639.37; the Taiwan Weighted Index increased by 0.95% to 22,003.34 points; the S&P/ASX 200 in Australia rose by 0.55% to 7,869.80 points.
• The Japanese yen traded sideways, with the yen against the US dollar widening to over 0.4%, reaching a high of 146.07. Japanese government bond yields narrowed in the morning.
• Oil prices narrowed their gains in the morning, while gold turned lower. US crude oil rose by 0.3%, Brent crude rose by 0.36%; gold prices fell by 0.21%.

【Update as of 11:00】

By midday, the Japanese stock market plunged, with the Nikkei 225 index down 0.43% to 36,075.51 points, and the TOPIX index narrowed its gains to 0.76% to 2,572.92 points.

The USD/JPY fell by 0.22% to 146.52, with losses widening to over 0.4%, reaching a low of 146.07.

Japanese government bond yields narrowed, with the 10-year bond yield down by 0.83%.

The South Korean composite stock price index rose by 0.68% to 2639.37; the Taiwan Stock Exchange Weighted Index rose by 0.95% to 22003.34 points; the Australian stock index S&P/ASX 200 rose by 0.55% to 7869.80 points.

In the morning, the increase in oil prices narrowed, with US crude oil rising by 0.3% and Brent crude oil rising by 0.36%.

In the morning, spot gold prices turned lower, down by 0.21%.

【Update at 10:00】

Japanese stocks rise for the third consecutive day, with the Nikkei 225 up by 0.48%

The Nikkei 225 index opened up by 0.48% to 36407.85 points.

The TOPIX index opened higher by 1.01% at 2579.40 points.

Mitsushige Akino, President of Ichiyoshi Asset Management, stated:

"If the US economy experiences a soft landing, the Japanese stock market will not fall below recent lows again."

Electronic product and automobile exporters are among the major contributors to the rise in the TOPIX index. Mitsubishi UFJ Financial Group rose by 1.98%; Toyota Motor rose by 2.6%; Sony Group and SoftBank Group both rose by over 5%.

Japanese government bond yields declined, with the 10-year government bond yield falling by 1.30%.

The Japanese yen traded sideways, with the USD/JPY rising by 0.03% this morning to 146.89. Mitsushige Akino believes that as the yen does not appreciate significantly, the Nikkei 225 index may return to the 200-day moving average near 36900 yen by the end of this week.

Asian Stock Markets Open Higher

The Seoul Composite Index in South Korea opened 0.76% higher at 2641.36 points.

The Taiwan Stock Exchange Weighted Index rose by 1.51% to 22125.91 points. The world's largest chipmaker, TSMC, saw a nearly 1% increase.

Australia's S&P/ASX 200 index rose by 0.87% to 7894.60 points.

Rise in Oil and Gold Prices

Oil prices rose on Wednesday, with WTI crude up by 0.89% and Brent crude up by 0.82%.

Concerns over escalating Middle East geopolitical tensions and a decline in U.S. bond yields continue to drive demand for physical gold, leading to a 0.16% price increase.