Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, discusses the impact of Yoshihide Suga’s departure on investor confidence in Japan:
‘’Investor confidence in the Japanese market had taken a hit as the country confronted its worst wave of the pandemic. The latest HL survey showed confidence in Japan fell by 8% in August, so it’s not surprising that the news of Yoshihide Suga departure saw stocks in Tokyo lift in response. By announcing he won’t run for re-election in the upcoming leadership race, he’s stepping down as premier, to make way for a successor to try and halt soaring infection rates.
“Although the Nikkei ended up 2%, gains may have been held back, because Suga was considered to be pro-business and had spearheaded a drive to promote a more digital focused economy, and push firms to become leaner and more efficient to solve Japan’s sluggish productivity problem. Investor confidence in Japan is now likely to lift, but the political turmoil of Suga standing down after only just a year in position, following the near eight year Abe era, may weigh on future gains. The ruling party is now in a race to find a new leader just weeks before the general election, and as candidates jostle for pole position, uncertainty is likely to reign on the markets.’’